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

4 COMMENTS

  1. Kalyalya is the wrong chap at BOZ!
    He is too much of a Textbook Economist! It’s time to get people who are able to think outside the box!!
    We seem to be having IMF puppets who want to implement everything IMF suggests!
    UPND will be committing political suicide!

  2. With our governor Is a failure very is nothing he will do apart from proposing to increase tariffs. HH it is never too late can you bring magande and fundanga for kalyalya I’m sorry. Cut middle men

  3. I believe cosmetic solutions just punish innocent people. My thoughts are that for a long time politicians have avoided an honest and straight talk approach on these issues with the citizens and hence made a very serious concern become a mystery and taboo topic, instead of a sorting out the real problem with strategic solutions while encouraging everybody to participate. Politics here has made us pay a high price.

    It is important to learn from history so as not to repeat the past mistakes. We simply can not go on as usual and expect this serious problem to disappear unless this administration bites the bullet to fix what is really causing this problem

    For instance, its been 57 years after independence and previous administrations should have had deliberate plans to expand the our capacity to generate power as the population and economic activities have out grown the current supply.

    The rate at which the machinery was left unserviced for long periods meant frequent breakdowns would eventually happen and hence the high price of maintenance costs and the evident repercussion of poor planning.

    Lastly political involvement in the running of these institutions has ruined the profitability of these institutions hence capital investments were never a priority and hence it became a loss making institution.

    Now we the users of power are being made to pay for the lack of fore sight and serious altitude of poor planning from our leaders.

    Leadership is the serious problem at the center of all this and it have been passed on from one administration to another at the expense of citizens and business. This insanity has to stop now.

    If we want to fix this problem there is no shortcut but to make the power utility viable. This can no longer be passed on to the citizens to bear the costs of poor management and poor governing visionaries.

    Its time to bite the bullet. What ever it takes to make our power company profitable and self sustaining, it must be embarked on strategically and consistently until we achieve the intended goal of an overflow of excess power supply.

    One aspect which has alluded us is the failure of taking advantage of the gap created by the high demand of power by every other country. Foresight would have been the weapon to achieve this. From 1964 till now we should have been building alternative energy resources and expanding export to other countries. We have been to comfortable with what we built and relaxed thinking it would never wear down. Now we are in panic mode and an over taxed and under serviced custom based should be not be made to bear the cost of years of neglect and sheer mismanagement.

    Our greatest problem is lack of leadership and this vacuums needs to be dealt with quickly before we lose what we have and start from scratch at a great cost.

    So I suggest you start from within. The Bloated system needs to be brought down to it’s rightfully size and revise some of the contracts of supply of power to other nations if they are not profitable. Maybe it would be better to consider those contracts needing renewal to be reserved and supply concentrated back home till we build capacity to export power comfortably. This will help to stabilize supply until we fix what needs to fixed through investing in more renewable energy resources. We can use every tool at our disposal like ensuring smart houses with sole panel electricity generation systems are part of the requirement for a house to be built in certain areas.

    We can zero rate tax on some of these items. The excess power per house hold can sufficiently build back power for our power utility and the house owner gets paid for supplying the excess power to Zesco.

    No need to reinvent the wheel let’s copy what is working in other countries and adopt these strategies. Short term quick fixes will allow for continuity while the long term projects are being done.

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