Power crisis dims festive mood

LETTICIA MAGOMBO/ LIVINGSTONE MARUFU

Rolling power cuts, rising prices and the liquidity crunch have dampened prospects of merrymaking this Christmas as Zimbabweans brace for a dark and subdued festive season.

Zimbabwe is battling power cuts due to low generation at Kariba Power Station due to low water levels and the effects of the crisis was rubbing on to rise in goods and other services.

Experts say the power crisis has also been worsened by the underperformance of the thermal power stations due to aging equipment.

Confederation of Zimbabwe Retailers (CZR) president Denford Mutashu told Business Times that this Christmas would be a bleak one for the sector.

“The festive period mood has been unfortunately dampened by the power challenges that we are facing currently,” Mutashu said.

“The punch is when it is happening because a lot of the time we are receiving electricity during the night upwards of 10 pm and before we wake up around 4 am there is no electricity as well so we are grappling with power supply issues,” Mutashu told Business Times.

He said the power cuts have resulted in added costs as retailers search for alternative sources of power with some having to opt out entirely due to the exorbitant capital demands.

“We have also noted that costs have continued to pile, some have moved to alternatives like solar and generators but for the majority, they can’t procure generators that can drive the whole store,” Mutashu said.

Power outages have also affected the manufacturing sector which has detrimental effects on the value chain.

“We also got reports from the manufacturers that production also has largely been affected because power is only available during the night so during the greater part of the day there is no electricity,” Mutashu added.

He also said that this was only adding to the multitude of stresses that were affecting retailers who usually get busy on the festive season.

“We had anticipated sales to start increasing at a phenomenal rate just like it had happened before during this time but unfortunately sales, especially for formal businesses, remain very subdued.”

The gloomy festive season comes as the country’s cost of living for a family of six rose 6% to ZWL$290 000 in October 2022 from ZWL$274 858.75 in August following price hikes triggered by market jitters stemming from currency volatility, official data from the Consumer Council of Zimbabwe (CCZ) shows.

CCZ attributed the increase in the basket to “increases that were made of non-food items such as transport and electricity”.“The increase in electricity tariffs, as well as incessant power cuts, were the major cost drivers in the increase of prices for various commodities,” it said.

“Influence of the parallel market exchange rate to ZWL$900: US$1 from ZWL$250: US$1 as at end of January 2022 was also a cost driver as some manufacturers and retailers are opting to buy US$ through this platform.”

The rise in the cost of living comes as salaries have been low. The civil servants received US$200 bonuses for November and December on top of the US$200 and ZWL$70 000 salary per month.

It’s even worse for workers in the private sector as the majority earn less than US$250 a month.

“The generality of the workers in Zimbabwe are earning way below the poverty datum line and it makes it even more difficult to plan for the festive season later alone to plan for January next year as schools open.

“That is why we are asking for a US$ salary as it somehow alleviates the hot soup that we are in,” Zimbabwe Congress of Trade Unions president Florence Taruvinga said.

“Before the festive season kicks off, the prices of basic commodities were going up and with the businesses wanting to maximise, workers or citizens will be poorer at the festive season.

“With the rate going at around ZWL$900  per US$1 it is not surprising that by Christmas time it will be around ZWL$1000 per US$1 thereby eroding disposable incomes even further,” she said.

Taruvinga said the economy has dollarised, prices of goods and commodities are now charged in US$, therefore workers must likewise be paid in the currency that is being recognised in the country.

Workers are of the view that dollarisation can restore the wages and salaries to the pre-October 2018 levels. Government says it is working on a de-dollarisation plan which will see the local unit as the sole currency.

Taruvinga said the ZCTU was aware of the high levels of suffering and agitation of the workers and has given the government and employers the chance to resolve the current impasses at TNF and various respective National Employment Councils.

“We trust that the social partner of TNF will understand that as long as the issues of salaries remain unresolved, we are sitting on a time bomb whose time is fast approaching,” she said.