eBusiness Weekly
Kudzanai Sharara
This week was a hive of activity, but as we look at it in retrospect, probably the biggest news is that of ZESA’s 50 percent tariff increase.
The need for electricity cuts across all facets of human life, economically and socially. As a result, whatever changes that affect the provision and pricing of electricity has a bearing on human lives one way or the other.
The big question that needs explaining is whether the upward tariff adjustment is justifiable or not. Without doubt it is justifiable. In fact, it was long overdue. Before the latest adjustment, electricity consumers were now paying an equivalent 2.33 US cents per kWh.
This according to ZESA, and many would agree, was now sub-economic. In fact, it was now threatening the viability of power provision. With Zimbabwe importing some of its electricity needs at more than 10 US cents per kWh, the level of subsidy that ZESA was now providing to its customers was not sustainable.
If tariffs were to continue at such low and sub economic levels, there was serious risk of not only failing to import power but also failing to service and provide working capital for local supplies including coal which ZESA gets from private companies.
We must, however, point out that this is not a license for businesses to put up prices by such magnitude. There is need to access the impact of this latest tariff review on the overall cost of doing business. Only then can a decision be made on how the additional cost can be absorbed, either by the companies or consumers or both
