Economy, Africa

Zimbabwe: Government defends steep power hike

Grappling with economic crises, government to index power tariff in US currency to overcome inflation and exchange rates

Jeffrey Moyo   | 10.10.2019
Zimbabwe: Government defends steep power hike

HARARE, Zimbabwe 

Defending steep 320% hike in electricity tariffs, the Zimbabwean government has said that the revenues, would help to repair generators and also to streamline supply by paying $19.5 million to South Africa and Mozambique every month, to purchase power.

Grappling with soaring inflation and stagnant wages, the country is experiencing heavy load shedding, in some areas extending on an average to 18 hours.

The International Monetary Fund had recorded Zimbabwe’s inflation rate at 300% in August, after devaluation of currency in June this year.

According to the Zimbabwe Energy Regulatory Authority (ZERA), the rise in electricity charges was accentuated by the depreciation of local currency against major world currencies. According to new rates, the electricity tariff has been fixed at a whopping $162.16 per kilowatt hour from earlier $38.61 per kilowatt hour.

“The authority analyzed the current situation, the load shedding of 18 hours, the high cost of alternative energy supplies. We deliberated on cost effective measures, reflective in the decision,” said Ester Khosa, ZERA board chairperson.

Khosa said beginning next month, the ZERA would start indexing power tariff in the U.S. currency in a bid to overcome inflation and exchange rates.

Zimbabwe is experiencing its worst economic crisis in a decade, which went after the departure of late dictator Robert Mugabe from office two years ago. Mugabe died on Sep. 6 at Glen Eagles Hospital in Singapore, reportedly from cancer.

The power tariff hike has come within three months, following raising prices of fuel and basic goods. However, wages of both government and private sector workers have remained stagnant, infuriating the majority of citizens who have pinned the blame on the country’s President Emmerson Mnangagwa.

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