Does it make economic sense to continue power exports to Namibia?
Official Namibia government and their Ministry of Industrialization and Trade data reveals that Namibia has annual electricity demand of 600MW, has generation capacity of 400MW with annual power deficit of 200MW.
Following Zambia’s Energy minister Chibwe Kapala’s confirmation in the National Assembly, that Zesco has continued to export about 100MW to Namibia, more questions than answers are being raised.
Despite a home deficit now growing to a reported staggering 750MW and some areas, businesses and households in Zambia being subjected to now over 12hours of load shedding a day, crippling business and economic operations, more and more people are getting economically hurt.
Another feature is that the Zambian government has sighted drought as the main cause of reduced power generation, a variable that immediately triggers a force majuer clause in supply contracts. But then, how do you explain the continued exports of a sizeable 200MW?
Power utility ZESCO is a State Owned Enterprise, ideally expected to prioritize national needs. But the utility has issued force majeure notices to its local clients but continues to hold on to its exports. This not only means low productivity for the local economy, but household inconvenience is also adding another dampening dimension.
Some economic questions ring when one independently and critically looks at this scenario we’re local supply and economic wellbeing is sacrificed at the expense of exports. Below are some of the key questions:
- Do these so sacrosanct export power supply aggreements have force majeure clauses? If not why not draw on international law precedence set even within the region? Have officers or the company secretary who missed out inserting the force majeure clause been held accountable?
- At the rate at which load shedding hours are increasing, how many local businesses will collapse and die? Is the damage to local businesses less harmful as perceived by the government than ending the exports to Namibia?
- Can Zesco or the Ministry of Energy release and make public their cost benefit analysis that has informed their economic decision to opt to continue with export at the expanse of local supply? Decimating local SME sector and capital risks setting local businesses backwards which may take another generation to recover
- There are some arguments that these power exports supply agreements have clauses that can not be breached, since ZESCO is a public company, why cant they make these agreements public, is there something to hide in these agreements?
- Last but not the least, has there been any attempts to engage in negotiations with Namibia to halt exports due to the great need at home, why are we under estimating the long term damage to the local economy if there is no cost benefit analysis shared??
Dear ZBT reader, Zambia has about 1.3 million SMEs or local businesses which rely on stable energy supply, which means that for an average family of 5, SMEs are caterinf to a population of over 6.5 million. what other questions do you have on this matter?
-Zambian Business Times