Zambia’s electricity utility, Zesco, recently warned of increased loadsheding of up to 12 hours as power generation deficit has risen by nearly 20% since September, despite massive price hikes.
This is largely a drought-inflicted power shortages owing to low water levels at Kariba which in March this year was only 12% full, compared with 43% at the same period previous year against an ideal capacity of 69%.
Zesco’s Director of Corporate Services Patrick Mwila told a press conference that electricity deficit had grown to 810 megawatts (MW) from a 690 MW gap in September.
He said a contract to get 300 MW from South Africa’s Eskom which is also in the woods had expired and would not be renewed.
“Zesco was now relying on short-term power imports from the Southern African Power Pool (SAPP) to plug the deficit,” he said.
Zesco has already used 25% of the water that it was allocated for power generation this year by the Zambezi River Authority, which manages the river on behalf of Zambia and Zimbabwe, he said.
“It is important that the water resource is prudently managed to guarantee power generation,” Zesco’s director for power generation Fidelis Mubiana said at the same briefing.
Meanwhile, Zambia Institute for Policy Analysis and Research (ZIPAR) research fellow, Caesar Cheelo warns that the country’s currency would succumb to the pressures and would continue to fall.
He said the electricity shortage would contribute to the weakening of the local currency adding that since the country is relying on imports to bridge the gap it would put pressure on the balance of payments. Adding that this was compounded by huge foreign debt.
He said because of the underlying factors Kwacha will lose 13 per cent of its worth.
Cheelo urged government to change its priorities list and fund first the sectors that bring quick returns, such as the production lines as opposed to infrastructure development. “If we are choosing railways or roads, how much productivity is yield compared if you set up a factory that is responsible for domestic production? How much productivity will the railways and roads contribute compared to any energy project that stabilises energy supplies power supply?
“A lot of issues have to do with our fiscal choices in public expenditure, our public investment where do we preferably put them as a country?” He queried maintaining that debt servicing was exerting pressure on the local currency.
In a recent Ministerial statement, the Minister of Energy, Matthew Nkhuwa, confirmed the power shortage saying it is putting pressure on economic activities thereby undermining local production and capacity utilisation.
The other factors putting pressure on the local currency include the country’s wage bill, reduced agricultural output because of droughts and reduced industrial productivity and the under-performing manufacturing sector, among a host of other things.