Zimbabwe Hikes Electricity Tariffs Again

Harare: The Zimbabwe Electricity Supply Authority (ZESA) has hiked electricity tariffs by 50%, giving a cumulative 300% tariff increase within the past two months, ENN reports. This tariff hike comes after the release of a new electricity tariff schedule by the Zimbabwe Electricity Transmission & Distribution Company ( ZETDC), a subsidiary of ZESA, effective 1 November 2020. The first 200kw of electricity for domestic metered users will now cost ZWL$631 , up from ZWL$200 in September 2020. Resultantly, consumer disposable incomes will be dwarfed, and industry will bear the twin-brunt of high operating costs and an economy experiencing low consumer demand. Most consumers’ incomes were affected by the Covid-19 lockdown, and this has led them to turn to basic commodities only as luxuries have become unaffordable.

This inflationary move comes hardly a week after the Confederation of Zimbabwe Industries cautioned Government against implementing interventions that will further strain Zimbabwe’s already humstrung local businesses. The world over, businesses were cushioned by their governments against the financial impact of Covid-19 on their operations through customised rescue packages, including tax breaks, subsidies and direct financial assistance. For Zimbabwe, businesses have been left on their own, reeling from the impact of this global scourge , which was caused havoc even in developed countries. Zimbabwean businesses endured over 4 months of extreme national lockdowns by its Government, a development that left most business operations partially paralysed, including informal businesses.

Applying the theory of relativity, although in line with regional tariffs, Zimbabwe’s electricity costs are high compared to the monthly income levels of its employees, particularly civil servants who constitute over 50% of Zimbabwe’s formally employed population. It would be an early Christmas bonus for consumers if manufacturers and retailers do not respond to this 50% electricity tariff increase by effecting a fresh wave of commodity price increases in Zimbabwe.

If yester year’s experiences are going to recur, besides price increases of basic goods and services, Zimbabwe faces consequential environmental damages from this electricity tariff trap as the majority of its financially constrained citizens will turn to firewood again for cooking and lighting purposes – in the process depleting forests.

Zimbabwe’s new electricity tariff schedule is attached here.