Power outages cost Zimbabwe businesses $200m weekly

Monday August 5 2019

A Zimbabwean student reads using a solar lamp.

A Zimbabwean student reads using a solar lamp. Zimbabwe is experiencing frequent and prolonged power outages. PHOTO | FILE | NATION MEDIA GROUP 

KITSEPILE NYATHI
By KITSEPILE NYATHI
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On July 20, making a call on Zimbabwe’s biggest mobile phone network, Econet, was almost impossible as its services were down.

“Our generators failed to kick-in following a Zimbabwe Electricity Supply Authority (Zesa) power outage, resulting in an automatic system shutdown to protect critical network operations centre equipment,” Econet said.

POWER RATIONING

Econet is just one of the businesses bearing the brunt of perhaps Zimbabwe’s worst power shortage in history, which has seen Zesa, the power utility, ration electricity supply for up to 18 hours daily. This is taking a toll on businesses which have to rely on diesel, a rare commodity with erratic pricing in Zimbabwe, for their operations. The price of diesel has jumped from $1.38 in January to about $7.50 at the end of July.

Econet, owned by billionaire Strive Masiyiwa, has warned that it may have to resort to “drastic measures” after incurring the cost of buying and ferrying two million litres per month of diesel to power its base stations. The company estimates it requires 12 million litres of diesel to provide uninterrupted service but the fuel is not readily available.

In May Zimbabwe significantly reduced electricity generation at its biggest hydro plant after water levels at Kariba Dam dropped significantly. The Kariba Power Station, which was already operating at half capacity, reduced generation to 358MW from 542MW.

Zimbabwe is only producing about 1,100MW against peak demand of 2,200MW. The country cannot import electricity because it owes South African and Mozambican power utilities $80 million.

Thursday, Harare increased electricity tariffs for domestic consumers threefold to three US cents in a mid-term budget review. Finance minister Mthuli Ncube said non-exporting businesses would pay 5 US cents per kilowatt/hour.

HIGH FUEL PRICES

The Confederation of Zimbabwe Industries (CZI) said several companies have closed due to the power cuts, while the Zimbabwe National Chamber of Commerce (ZNCC) said the power shortages cost industry up to $200 million a week.

“The whole situation is a disaster,” CZI president, Harry Ruzvidzo, said. “Our members are suffering and a number have already closed down and some scaled down.”

Fuel prices have gone up four times since the beginning of the year and the first increase in January sparked violent protests throughout the country. “The manufacturing and agriculture sectors have been the most affected by the power cuts,” ZNCC chief executive Christopher Mugaga said. “The economy is losing between $150 million to $200 million weekly in lost production and exports.”

The government last month removed import duties on solar energy accessories including batteries and cables, hoping this would reduce demand for on-grid electricity.

Energy Minister Fortune Chasi also said hotels would soon be compelled to install solar systems to reduce demand for electricity from hydro and thermal sources. The government says it wants the country to produce 1,575MW of solar power.

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