An escalating energy crisis has pulled the plug on hopes of reviving Zimbabwe’s economy as production grinds to a halt in a manufacturing sector already battling the impact of sky-high inflation.
Although central bank chief Gideon Gono said last week that shelves would soon be full again after a controversial pricing crackdown, analysts say the power deficit will accelerate the meltdown as inflation nears 8Â 000%.
“Because of electricity shortages we lose everything,” said John Robertson, an independent Harare-based economist.
“Production time is lost as well as export revenue. We are now importing almost everything.”
Manufacturers in Zimbabwe have long had to contend with a lack of foreign currency and a lack of spare parts, even before the government in June imposed a ceiling on the amounts that businesses and retailers could charge.
Unable to cover their costs, many producers of household staples such as bread and washing powder simply pulled down their shutters.
While Gono has warned the government must in future allow for “an environment that respects the viability of producers of goods and services,” the shortage of power means that a return to full production is unlikely.
Workers in industrial areas of Harare are often seen sitting outside their work places or milling around after power cuts, in some cases lasting for days, have brought factories to a halt.
The situation has visibly worsened in the last three weeks after the country’s neighbours reduced supplies because of long-overdue debts.
“There are companies which were down for four days last week and others were just operating on an on-and-off basis,” said Calisto Jokonya, president of the Confederation of Zimbabwe Industries.
Obert Nyatanga, spokesperson for the Zimbabwe Electricity Supply Authority (Zesa), said that the power utility is operating at just over 50%.
“We are operating at 55% of our requirements, including imports,” Nyatanga said, attributing the power failures partly to rampant vandalism.
“We expect the situation to improve but you can not plan for anything as we are now approaching the rainy season, which causes more problems.
“Yes, there are electricity shortages, but this is also caused by vandalism of equipment and theft of cables.”
The situation is also being partly exacerbated by Zimbabwe’s struggles to meet payment demands from neighbours such as Zambia and Mozambique, which it has come to rely on for power supplies.
Last month, Mozambique reduced power supplies to Zimbabwe from 300MW to 195MW due to a $35-million debt, which Nyatanga said had since been paid.
A government official who refused to be named said Harare has paid $20-million to Mozambique.
The impact of the power shortages can also be seen in the mining sector.
It is Zimbabwe’s major foreign-currency earner, at about $700-million, but is operating at only 30% to 50% of capacity due to the power crisis.
Doug Verden, chief executive of the Chamber of Mines, said the electricity shortages have had a “ripple effect on the industry”.
He said at least 16 mining companies had resorted to importing their own electricity and urged the government to charge economically viable tariffs to be able to repay their debts on time.
The country’s main telephone provider, TelOne, also reported the excessive load shedding was causing serious telecoms disruption.
“Some areas are going without electricity for 24 hours and some, eight hours a day,” TelOne said in statement.
“In the absence of electricity, our telephone exchanges use diesel generators and of late there has not been a steady supply of diesel, resulting in some exchanges shutting down completely until electricity has been restored.”
David Mupamhadzi, chief economist of the Zimbabwe Allied Banking Group, said failure to remedy the power deficit meant any other government measures to boost the economy would be futile.
“Unfortunately all government programmes aimed at reviving the economy will not be successful because of electricity problems,” said Mupamhadzi. — AFP