Rolling blackouts costs Zim’s economy $2bn


The mining sector has engaged ZESA for it to be prioritised when the power utility rolls out its load shedding programme amid revelations that power outages are costing the economy $2 billion.

The power utility, as was first reported by Business Times last month, moved to implement the initial phase of load shedding, largely caused by dwindling water levels at Kariba Dam, which has halved generation at Kariba to 500MW.

The problem also comes amid capacity pressures at the power utility’s four thermal power stations following years of insufficient investment in infrastructure, compounding the country’s economic woes. ZESA owes regional suppliers about US$80m which militates against efforts to import more electricity to cover for shortages.

Isaac Kwesu, the Chamber of Mines of Zimbabwe chief executive officer told Business Times this week that the mining industry has engaged ZESA over load shedding for the sector to be prioritised.

“Unlike other sectors, we also fear for the safety of people working in the mines. Their safety is at risk. We are very positive that discussions with ZESA on the likely impact of the blackouts will bear fruits,” Kwesu said adding that load shedding should be minimal
in one of the country’s largest foreign currency earners.

“Mining is very important and requires electricity every hour and 365 days a year.”

Kwesu said the chamber is engaging members on the impact of the load shedding.

The call by Kwesu to prioritise the mining sector comes as the Confederation of Zimbabwe Industries (CZI) said industry has been affected by the power cuts imploring the power utility to import and plug the hole created by low generation at Kariba.

“I have had calls from the productive sectors raising their concerns,” CZI president Sifelani Jabangwe told Business Times.

“Our output is affected each hour by electricity outages. So, we are urging the authorities (ZESA) to import more power to cover for the shortfalls so that industry is not affected.”

ZESA is struggling with severe operational problems that have led to renewed load shedding, crippling financial problems and escalating debt.

Energy experts told Business Times that it was  likely that the power utility  will escalate rolling blackouts after the initial phase and load shedding might last the rest of the year if not more years  due to  dwindling water levels at the Kariba Dam.

The load shedding is being experienced during peak hours, where production is expected to be at its highest. They said ZESA’s situation will become an albatross around Zimbabwe’s neck and one of the biggest threats to the economic prospects.

This has put businesses and citizens at financial risk owing to the load shedding phenomenon which has started to choke the already ailing economy. Load shedding has forced most business operators to resort to using back up diesel generators, which are expensive, in order to stay afloat.

Economist John Robertson told Business Times this week the economy has lost more than $2 billion because of load shedding. “Its (load shedding) very damaging for the critical mining sector, manufacturing, commerce and farming industry though the winter
cropping is starting now. It’s not good for industry.  The economy is likely to have lost more than $2 billion so far because of inefficiencies which add to costs,” he said.

“This means we are not competitive which leads to a negative gross domestic product as projected by the International Monetary Fund (IMF),” Robertson added.


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