Energy crisis threatens economic recovery
Saturday, 13 March 2010 15:23
GWERU – Industry and Commerce Minister, Welshman Ncube says an immediate economic turnaround will be difficult before the crippling electricity shortages are addressed. Zimbabwe’s electricity woes worsened last month after most generators at the Hwange thermal power station were decommissioned.
Zesa is now toying around with plans to decommission the stations altogether and this could plunge the country into a far- reaching energy crisis.
Ncube told the Gweru business community at a consultative meeting on Thursday that the high tariffs and the inconsistency in the supply of electricity had hampered efforts to increase industry’s capacity utilisation.
“Government is aware that all our efforts to turnaround our industries will be futile unless we turnaround the energy supply,” he said.
Ncube said government had since set up a committee chaired by Deputy Prime Minister Arthur Mutambara to investigate utilities charging tariffs that did not match their service provision.
Zesa is being investigated by the Competition and Tariff Commission over its tendency to issue excessive bills despite the fact that most of the time Zimbabweans have no electricity.Ncube said the problem was peculiar with other utilities and municipalities whose charges were stifling industrial growth.
“There is need for self-introspection by these service providers,” he said.”Imagine for a example a council where 90% of the revenue goes to salaries and only 10% to service delivery.
“If you do not do things properly, you invite the government to intervene and most of the times the government intervenes wrongly.”
Ncube said capacity utilisation in most companies had gone up from 10% at the formation of the inclusive government last year to 35%.
He attributed the slow improvement to the liquidity crunch and warned that the situation would not improve unless external investors come in. But the minister conceded that investors would not be encouraged by the
recently gazetted empowerment regulations that seek to force foreign firms to cede 51% of their shareholding to locals.
Business leaders told the minister the regulations were ill- timed. Alex Marufu, the Midlands chairperson of the Confederation of Zimbabwe Industries also urged the government to have a re-look at its “Look East” policy saying cheap imports from Asia were threatening industry’s viability.”It costs us $1,50 to make a pair of pata-pata (flip-flops) yet in some shops you get them at one dollar for two pairs,” said Joseph Ndlela, a human
resources officer at Bata.
“We just can’t compete despite that we have good quality.”Anchor Yeast chief operations officer, Roderick Musiiwa also challenged the government to tighten its anti-dumping regulations to protect local
manufacturers from cheap imports.
BY RUTENDO MAWERE