OUR VIEW ON THE FUEL AND ELECTRICITY TARIFFS DEBATE
There’s been a raging debate on social media following the statement made by the BOZ Governor that fuel and electricity prices may have to be increased as the status quo is not sustainable.
We agree with the BOZ Governor that the status quo is not sustainable, but we fundamentally disagree with him that tariffs and fuel prices should be increased, that is wrong and most Zambians can’t afford to pay more for electricity and fuel amidst an inflation rate of 20%.
The BOZ Governor and other technocrats in government need to start thinking outside the box, this mentality of increasing tariffs everytime there’s a financial crisis has to come to an end.
Here are some solutions for them ;
1: Expedite the operations of Kafue Gorge Lower Power Station. Once it’s fully operational they can export half the electricity generated from there to Congo, Malawi and South Africa at high tariffs, that will give them the money required to service Zesco’s loans and debt.
2: Charge the Mines and other industries that use alot of electricity higher tariffs, they can afford to pay.
They should also restructe Zesco and remove unnecessary employees from their payroll and reduce luxury expenses.
3: Immediately cut out all the middlemen from procurement of fuel, government itself should start buying fuel for the country, the use of corrupt agents should stop immediately.
4: The BOZ Governor should concentrate on ensuring the kwacha remains strong, because fuel prices are largely determined by the exchange rate. If the dollar was at K13 today we wouldn’t even be having this debate, in fact we would be looking at reducing the fuel price.
The same applies to Zesco, they have dollar loans yet collect their revenue in kwacha, as the kwacha weakens Zesco has to use more of it to service the dollar loans.
So the strength of the kwacha is actually the biggest elephant in the room, and that responsibility rests squarely with the BOZ Governor to ensure that the local currency remains stable.
NDC MEDIA 25.11.2021