Load Shedding Threatens Economic Growth
Captains of industry have warned that rolling power cuts will have a negative impact on Zimbabwe’s economic growth.
Finance and Economic Development Minister, Mthuli Ncube, revised the projected economic growth this year from 5.5% to 4.6% due to various factors that include foreign currency challenges, liquidity crunch, runaway inflation and exchange rate volatility.
Speaking to Business Times this week, Confederation of Zimbabwe Industries (CZI) president Kurai Matsheza warned that the 4.6% growth rate may not be attainable due to constant load shedding. He said:
Rolling power cuts are the biggest threat to the 4.6% gross domestic product [GDP] projections as businesses have significantly cut operation hours and this is going to impact the industry’s capacity utilisation.
We are at the peak period where there is huge demand and we are not producing enough.
With rolling power cuts expected to continue into November, the damage could have been done to limit the economy to reach its projected growth as machinery depends on power to continue operating.
The Zimbabwe National Chamber of Commerce (ZNCC) president Mike Kamungeremu concurred. He said:
If a solution is not found soon the GDP growth projections are likely not going to be met as subdued growth means reduced output thereby affecting the overall economic performance.
Production is disrupted and there is a likelihood of serious implications to our projected growth.
Some companies have reportedly cut their production capacity by 30% due to the prolonged power cuts.
Zimbabwe’s electricity shortages have been attributed to ageing power plants but ZESA Holdings’ power distribution subsidiary, ZETDC, recently said strong winds are to blame for power cuts as they are affecting electricity transmission infrastructure.
