CUTS concerned by proposed increment in electricity tariffs by ZESCO

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Lusaka Times, March 25, 2019

Zambia Electricity Supply Corporation (ZESCO) Women display a sketch diagram of power generation, distribution and Supply at this year’s International Women’s Day commemoration held at David Kaunda Stadium in Chipata

The Consumer Unity and Trust Society is concerned with the proposed increment in electricity tariffs by the Zambia Electricity Supply Corporation to the Energy Regulation Board.

CUTS while it agrees that Zambia should indeed begin to gradually move towards cost reflective tariffs – particularly in light of Zambia’s precarious fiscal position, consumer interests should remain at the centre of all decision-making.

CUTS Centre Coordinator, Ms Chenai Mukumba said her Organisation is of the view that only following meaningful efforts towards internal reform of ZESCO should an increase in electricity tariffs for consumers be considered.

She said while the Cost of Service Study has indeed been delayed, CUTS is opposed to a revision of prices before this is released as it is imperative to make sure that consumers are not being unfairly penalized for inefficiencies within ZESCO.

Ms. Mukumba said as such, before shifting the burden towards consumers, ZESCO should first and foremost look to resizing the structure of the institution to achieve efficiency.

“In 2017 we applauded the Government for lifting the life-line electricity tariff for consumers from 100 kWh to 300 kWh. We noted however that quantity-based subsidies were not the most efficient way of targeting the poor as low-income consumers are not necessarily those who use the least electricity”, she added.
Ms. Mukumba said another of CUTS key concerns remains the effect that the proposed increased tariffs will have on the provision of goods and services in both the economy and social sector.

She said this proposed tariff hike will mean that Zambians will see an increase in the cost of production of all goods and services.
Ms. Mukumba said with this increased cost of production, CUTS expect a rise in the prices of commodities despite the fact that disposable incomes for most households have remained largely unchanged. Further to this, social services will also be hard hit by this increase.

She noted that proposed tariffs for schools, hospitals, and orphanages, have more than doubled thus this will have an impact on the provision of basic social services such as education and health.

She said it is therefore imperative that ZESCO finds additional alternative ways of reforming the energy sector without passing the brunt of the burden onto the consumers.

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