Roundup: Plans to hike electricity tariffs in Zambia ruffle stakeholders

Plans by Zambia's power utility for an upward adjustment to electricity tariffs have ruffled stakeholders who feel it will have a negative effect on consumers.

Zesco Limited has applied to the country's energy regulator, the Energy Regulation Board (ERB), for a 75 percent increase in tariffs for 2017, to be effected in two phases, with the first 50 percent increase proposed to commence on May 1 and the second in September.

The regulator has since acknowledged receiving the request but indicated that it will hold public hearings on the matter in accordance with the law.

The power utility has justified its decision to seek an upward adjustment, saying it needed cost reflective tariffs to continue importing electricity from neighboring countries to meet the deficit while the government has clarified that the increase will not affect domestic consumers.

Henry Kapata, the power utility's spokesperson said the move should be supported by all stakeholders because the country will not be able to attract investment in the energy sector if tariffs remained unattractive and are not cost reflective.

According to Minister of Energy David Mabumba, to cushion low income customers, the life line tariff which was previously for 100 units has been increased to 300 units.

Apparently, the power utility was given a green light to implement tariff implements averaging 187 percent in August last year, although this was suspended after a public outcry.

But the latest plan has not gone down well with stakeholders.

Muyunda Illilonga, vice president of the African Consumers Union (ACU), an umbrella body of consumer bodies in Africa, said consumers should not be subjected to other high costs since the cost of living in the country was high.

The government, he said, should realize that people in the country were still struggling to survive due to the harsh economic situation, adding that the government should be considerate to its citizens.

His views have been supported by Caritas Zambia, a development wing of the Conference of Catholic Bishops, which said the decision is sad for the majority of citizens in the country whose salaries and incomes have remained unchanged while the cost of living has continued going up.

An increase in electricity tariffs will have spiral effects on prices of essential goods in the country, according to Eugene Kabiliki, the organization's executive director.

For the United Party for National Development (UPND), the country's main opposition party, the planned increase was a clear testimony on the mismanagement of the economy, adding that the move will have spiral effects in other sectors of the economy.

"Electricity is very key to production and such a huge upswing will bring about price increase in goods and services. The move will also make imported goods cheaper compared to locally manufactured ones," Percy Chanda, the party's chairman responsible for labor matters said in a statement.

According to him, at household level, the increment will force many impoverished families to abandon the use of electricity and resort to the use of other alternative sources of energy such as charcoal and firewood, a move that will have negative effects on the environment.

But Johnstone Chikwanda, an energy expert has supported the planned increase in electricity tariffs, saying it will boost the country's capacity to produce and supply power sustainably.

The expert, who is also chairperson of Energy Forum Zambia, a local think tank specialized in energy issues, said migration to cost reflective tariffs would significantly cut electricity subsidies.

While the move to hike electricity tariffs has raised eyebrows, the final decision rests with the country's energy regulator which has powers to either grant or reject the proposal. Endit