Magufuli directs Tanesco to cut power supply to Zanzibar over debt

Monday March 06 2017

President John Magufuli Sunday directed Tanzania Electric Supply Company (Tanesco) to disconnect power to all defaulters owing huge sums, including the Zanzibar government.

The president said all public institutions should clear their debts or be disconnected.

He said the government of the semi-autonomous archipelago, through Zanzibar Electricity Corporation (Zeco), owes Tanesco Tsh121 billion ($54.1 million).

“Don’t be scared... you should cut supply to any institution which is not paying its bills. I want to tell the Minister (of Energy and Minerals) Prof Sospeter Muhongo that power should be disconnected even to State House. If I sleep in the dark, then the State House official who didn’t pay the bill will be in for it, not you. You have my assurance on this. Money to clear debts is usually allocated to our ministries but it is instead channelled elsewhere.

“I’m told the Revolutionary Government of Zanzibar has not paid Tsh121 billion. You (Tanesco) are not politicians... you should stick to your professional obligations...just cut power supply. I’ve said that regardless of whether it’s State House, police, army or schools, no defaulter should be spared. Only this way can we ensure that funds allocated to ministries for electricity are used as planned so that Tanesco can survive and deal with the problem of unreliable power. Tanesco is unable to improve services because of unpaid government debts.”

The president was speaking during the laying of the foundation stone for a new Tanesco substation in Mtwara, in southeastern Tanzania.


Clearing debt

Reached for comment, the Zanzibar Minister of State in the Second Vice President’s Office, Mr Mohammed Aboud, said plans were underway for Zeco to clear its outstanding debts with Tanesco.

“President Magufuli’s directives are clear. The debt has to be paid and it will be cleared. We have already embarked on initiatives to put this issue behind us once and for all. We have also directed Zeco not to accumulate new debts. The two counterpart ministers recently held meetings on this matter and discussed how the debt will be cleared,” Mr Aboud told The Citizen, a local daily newspaper.

President Magufuli’s directive comes four months after the country's Parliament’s Public Accounts Committee (PAC) gave the government a six-month ultimatum to pay tens of billions of shillings owed to Tanesco.

The total debt was then Tsh125 billion ($56 million), with Zeco and the Union government owing Tsh85 billion ($38 million) and Tsh40 billion ($18 million), respectively.

READ: Tanzania seeks $200m World Bank loan to clear Tanesco arrears

Recovering debts

The then Tanesco managing director, Mr Felchesmi Mramba, told PAC that they needed help in recovering the debts, especially the one owed by Zanzibar, which had been accumulating since 2013.

“The main reason behind the Zanzibar debt is a significant difference in tariffs. Zeco is charging lower tariffs than Tanesco, and this means that they are collecting significantly less than what we charge them. Our tariffs are set by the Energy and Water Utilities Regulatory Authority, and we hope that tariffs will soon be harmonised now that Zanzibar has established the Zanzibar Utilities Regulatory Authority,” Mr Mramba told the committee.

READ: Magufuli sacks Tanesco head over electricity tariff increase

PAC chairperson Naghenjwa Kaboyoka wanted to know whether the Tanesco management had taken any “serious” initiative to recover the money, including threatening to cut supply to the semi-autonomous archipelago.

Mr Mramba said they had issued such a warning but the matter was then taken up by the government.

The then Treasury Registrar, Mr Lawrence Mafuru, told PAC that Tanesco was doing all in its power to recover the debt, adding that the issue of the Zanzibar debt was already on President Magufuli’s desk.

“I was involved in the submission of the debt report to the highest level of decision making in the country, and I strongly believe that the issue will be resolved soon,” he said. (The Citizen)