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Stakeholders reject plan to increase electricity tariffs in Zambia

Xinhua, November 11, 2015 Adjust font size:

Stakeholders in Zambia on Tuesday expressed misgivings over the decision by the country's power utility to increase electricity tariffs.

Zesco Limited has asked the country's energy regulator, the Energy Regulation Board (ERB), to increase electricity tariffs by over 50 percent for commercial, social and industrial users while sparing residential customers whose consumption is below 500 units (KWh) per month.

The move prompted the energy regulator to call on stakeholders to submit their comments on the proposed increase, as demanded by law.

In comments made during a public hearing on the proposed tariffs, President of the Zambia Association of Manufacturers Maybin Nsupila said increasing tariffs at such a time like now when the country's economy is struggling will kill the manufacturing industry.

He said the power utility should consider adjusting its tariffs in a gradual manner in order to avoid suffocating industries.

The manufacturing body has also urged the power utility to embark on reforms to improve its efficiency, reduce administrative costs and improve its services.

Echoing the views of manufacturers, the Zambia National Farmers Union, an organization representing farmers, said the proposed tariff increases are just too high to be implemented at once.

Humphrey Katontonka, the organization's senior economist, said the proposed increases were too high for farmers to remain viable and suggested that the tariff increment be done in four equal phases in order to allow commodity prices to catch up.

But the power utility has reiterated the necessity to increase the tariffs.

Bestty Phiri, the company's acting managing director, said the primary drivers for the tariff hike include the need for investment in electricity infrastructure, rising operating costs caused by inflation as well as the fluctuations in the foreign exchange market.

A failure to adjust the tariffs will lead to perpetual power cuts, higher energy costs and under-investment in power generation projects, he warned. Endi