Tanzania's president sacks head of power firm over tariff increase

Monday January 02 2017

Tanzanian President John Magufuli sacked the head of the state-run electricity company on Sunday after the firm put up tariffs, a move the president said would stymie his plans to industrialise the country.

Tanzania's energy regulator on Thursday approved a power tariff increase of 8.53 per cent by the Tanzania Electric Supply Company (Tanesco), less than half of what the utility said it needed to stem losses.

President Magufuli's office announced the sacking of Tanesco's managing director Felchesmi Mramba in a statement.

Hours before the announcement of Mramba's dismissal the president rescinded the price increase.

"It's unacceptable that while we are making plans to build manufacturing industries and ensure more citizens have access to electricity...someone else uses his position to increase power tariffs," Magufuli said in a statement.

About 40 per cent of Tanzania's population of around 50 million has access to electricity and the government is aiming to push that rate up to 75 per cent by 2025.


READ: Foreign firms hit by tax demands rethink Tanzanian expansion

Anti-corruption campaign

Since coming into office a year ago, Magufuli has sacked dozens of public officials as part of an anti-corruption campaign and a new drive to root out government inefficiency.

READ: What Magufuli did: The anti-corruption purge and austerity

He appointed a lecturer at the state-run University of Dar es Salaam, Tito Esau Mwinuka, as acting managing director of Tanesco.

The power firm had initially sought an 18.19 per cent tariff increase to snap a loss-making trend and clear debts to independent power producers and fuel suppliers.

The tariff increase, which would have taken effect from January 1, was approved by the Energy and Water Utilities Regulatory Authority (Ewura).

Loss-making Tanesco has warned that its "financial capacity will be paralysed" if the power tariff hike is not implemented.

READ: Tanzanian energy regulator plans talks on tariffs increase

Tanesco has been unsuccessfully seeking loans from the World Bank, the African Development Bank (AfDB) and commercial lenders to turn the company round.

Despite reserves of over 57 trillion cubic feet (tcf) of natural gas, Tanzania has been facing chronic power shortages over the past decade due its reliance on drought-prone hydro-power dams. (Reuters)