Paying Electricity Tariffs In US$ Will Worsen Things - Industry

Industry warns that paying electricity tariffs in US$ will worsen Zimbabwe’s economic crisis. Zimbabwe Electricity Supply Authority (ZESA) has announced that it will charge power usage in US$, but this move is seen as exacerbating the already dire situation faced by companies, which are experiencing prolonged power outages of up to 20 hours a day.

The Confederation of Zimbabwe Industries (CZI) acknowledges that ZESA imports electricity and pays in US$, but urges the authority to assume the responsibility of obtaining foreign currency and to remove it from the burden of companies. NewZimbabwe cites CZI as saying:

However, while this need is clear, the liability for raising this foreign currency should not be passed on to business.

Rather, ZESA should be able to purchase foreign currency from the auction or WBWS like every other importer, rather than getting the prerogative of charging in only one currency in a dual currency environment, where businesses earn a portion in ZWL$.

The industry in Zimbabwe is experiencing increased costs due to power cuts, which are causing damage to machines and increased production costs due to the usage of alternative energy sources.

CZI added that the payment of electricity tariffs in US$ is making it more difficult to do business and promoting dollarisation, which has more disadvantages than advantages for the industry. However, there is hope for improvement in the situation in 2023, as Kariba water levels are expected to improve from April to November of that year due to improved rainfall patterns.

The Zimbabwe Electricity Transmission and Distribution Company (ZETDC) expects Kariba Power Station to feed 775MW by mid-April to May 2023, up from the current 350MW.

Hwange Unit 7 was added to the national grid in March 2023 and Hwange 8 is expected to be complete by June 2023. The two power stations are expected to add 600MW to the grid, which would see power cuts declining by May 2023.

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