Energy Crisis Weakens Zim’s 2020 Economic Prospects

HARARE – An endless energy crisis in Zimbabwe continues to weaken the country’s 2020 economic recovery prospects, ENN reports. After presenting a ZWL$63.6 billion national budget anchored on a good agricultural season, a demand-led industry recovery, improved macro-economic stability, increased foreign currency availability and better business confidence, Zimbabwe Finance Minister Mthuli Ncube’s economic plan is confronted by a huge energy crisis. So dire is the energy situation in Zimbabwe after electricity and fuel shortages converged, in the process grinding industry and commerce to a halt. Winding fuel queues and the sound of generators have become common sights in Zimbabwe. Electricity blackouts are lasting upto 18 hours per day in Zimbabwe and most fuel filling stations are receiving fuel supplies once per week on average. Against these odds, will Zimbabwe achieve its forecasted 3% economic growth in year 2020?

Zimbabwe Electricity Supply Authority (ZESA) spokesperson Fullard Gwasira recently updated the nation on the worsening electricity situation in the country. In his load shedding notice, he said the implementation of stage 2 load shedding was necessitated by loss of power imports from the region and a depressed local generation. These electricity developments are a burden on the environment as firewood remains a major source of energy for cooking, lighting and heating for almost 90% of Zimbabwe’s rural and urban population.

With a vision of becoming an upper middle income economy by year 2030, Zimbabwe has a lot of work to do to realise this deed. According to the Word Bank, an upper middle income economy has a Gross National Income (GNI) per capita of between US$3,956 and US$12,235. This vision is supported by a targeted US$12 billion mining sector by year 2023, agricultural sector reforms and reindustrialisation. Unfortunately, Zimbabwe’s dream remains a paper tiger without decisive action on its energy woes. A nation without fuel is a stagnant nation, and an economy without stable electricity supplies foregoes its productive efficiencies and investor attractiveness.

Without addressing the currency conundrum and opening up the fuel sector to global competition, Zimbabwe’s fuel crisis shall worsen, ENN asserts. Long and winding fuel queues in Zimbabwe show a worsening fuel situation in the country. Despite the fuel price increases, motorists remain cynical as fuel supplies remain sporadic and low.

As Africa warms up to the Africa Continental Free Trade Area (ACFTA), the time is now for Zimbabwe to urgently align its energy generation capacities to its economic growth forecasts to mitigate massive deindustrialisation in the wake of free regional trade and competition. According to India’s Economic Survey, India needs quadrupling its per-capita energy consumption to get into the upper-middle income country club. Applying this principle on Zimbabwe which has an estimated electricity demand of 2200 megawatts against current estimated supplies of 700MW, the country must generate at least 7000MW of electricity to achieve a US$12 billion mining sector economy by 2023, and breach the 10000MW national electricity supply threshold before becoming an upper middle income economy in 2030. Energy availability remains at the core of Zimbabwe’s economic recovery and growth prospects in 2020 and beyond as it is directly linked to performances of Zimbabwe’s strategic economic sectors of agriculture, mining and manufacturing. Addressing Zimbabwe’s energy challenges will also save the environment from massive deforestation by firewood poachers.

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