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Zimbabwe power tariffs highest in southern Africa

Zimbabwe power tariffs highest in southern Africa

powerlines from the photo

By
Published: 16 October 2015

ZIMBABWE – Harare Bureau – Zimbabwe has the highest and least competitive electricity costs in the region, a situation which has made its exports unattractive.

In Zimbabwe users are required to pay an effective tariff of 14,5 cents per KWH to avoid being load shedded compared to an average of 8,3 cents per KWH in Botswana, Mozambique, South Africa and Zambia.

Speaking while officially opening the Zimbabwe Economic Review and Competitiveness Conference yesterday, Policy Coordination and Promotion of Socio-Economic Ventures in the President’s Office Minister Simon Khaya Moyo said the current uncompetitive electricity costs are prohibitive to economic growth as companies cannot export at competitive prices on the back of weakening regional currencies.

“In the region, Zimbabwe based firms face higher electricity costs, which makes products least competitive. Zimbabwe users are required to pay an effective tariff of 14,5 cents per KWH to avoid being load shedded compared to an average of 8,3 cents per KWH in Botswana, Mozambique, South Africa and Zambia. This is 57 percent of what Zimbabwe business pay for electricity,” said Minister Moyo.

He said this scenario was typical across various sectors of the economy where on average, Zimbabwean firms borrowing costs are twice to three times higher than the levels obtaining in the region.

Minister Moyo said the prevailing high lending rates are a reflection of combined effects of several factors, but paramount among them being the widespread perceived risk and limited investor confidence.

He said Zimbabwe’s international trade flows and their composition point towards a sustained loss of competitiveness while merchandise imports have risen twice fast as exports in the last five years resulting in the continued worsening of our balance of trade.
Minister Moyo said for a lasting solution to be found the government must speak in one voice and there should be sound policy coordination among ministries.

“Going forward, the government should speak with one voice considering that we are speaking of the same economy. We should hasten facilitation of investment deals and desist from taking three months to facilitate a business arrangement. That is unacceptable.

“Although the country continues to enjoy a stable macro-economic environment, which is supportive of overall economic activity, performance is weighed down by liquidity constraints and worsening trade balance among other issues,” said Minister Moyo.

He said the government has embarked on a programme of parastatal reform, which has prioritised 10 strategic enterprises for urgent attention.

Minister Moyo said specialised audits and various reforms and turnaround options have been identified.

He said public enterprises should implement prior year’s audits recommendations done by the Auditor General to improve transparency, corporate, efficiency and effectiveness of institutions.

There should be implementation by all public entities of the auditor general’s prior years recommendations. Recommendations were done and actually they are now gathering dust somewhere,” said Minister Moyo.