Energy shortage cripples industry

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THE Confederation of Zimbabwe Industries (CZI) says capacity utilisation is set to decline much more than expected this year as power shortages continue to impede productivity.
In January, the industry representative body warned of a gloomy outlook for 2019, projecting that capacity utilisation would decline to 34,3 percent from last year’s 48,2 percent as economic fundamentals continued to decline.
These projections, however, did not consider the effect of power shortages, which were not apparent at the time.
“We are suffering effective load-shedding that is running for up to 18 hours a day and production has been declining across all our membership,” Kurai Matsheza, CZI’s energy subcommittee chairman, said last week at The Financial Gazette’s inaugural Annual Energy Innovation Summit.
“We do a capacity utilisation analysis every year, which has been tracking southwards. And even though we are still to do our survey this year, judging by what our members are saying it is actually going to be significantly lower this year as a result of the power shortages,” he said.
A CZI 2018 Manufacturing Sector Survey covering the period September 2017 to August 2018, which did not touch on the current power crisis, said waning confidence in the economy due to lack of a clear policy direction on currency issues, among other factors, would result in companies scaling down operations in 2019.
The situation has, however, turned out worse with the power crisis aggravating the situation.