How Increased Electricity Tariffs Can Further Collapse The Economy

The recent move by the Zimbabwe Electricity Supply Authority (ZESA) to increase electricity tariffs has been described as detrimental to the economy.

An article in the Herald identifies a number of negatives associated with the decision. The article noted that high electricity tariffs will increase the cost of production. Below are some of the adverse impacts the article associated with the decision.

  1. Water provision is to be affected – pumping of water demands the availability of power. Harare City Council also attributes erratic water provision to power cuts.
  2. High tariffs threaten the existence of companies – It will become unsustainable for some companies to continue operating as the cost of production increases. Already, some companies resorted to using diesel power generators which are also affected by the unavailability of fuel and high costs.
  3. Constrained growth – Agriculture (Irrigations) needs electricity for pumping water, Industry needs power for the production of goods and services.
  4. Retrenchment as capacity utilisation is limited in the industry – they will, therefore, resort to laying off workers.

ZESA was urged to invest in renewable energy, curb power leakages at generation, distribution and consumption.

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More: The Herald

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