Tendai Kamhungira 
BUSINESS says rolling power cuts in Zimbabwe, which are running up to 12 hours a day, have increased the cost of doing business and may result in price increases, threatening economic growth targets.
This comes after ZESA Holdings’ distribution arm, Zimbabwe Electricity Distribution Company (ZETDC) recently said that increased economic activity had spurred increased demand for electricity, leading to the current power cuts.
The Zimbabwe National Chamber of Commerce president, Mike Kamungeremu, told The Financial Gazette this week that the power cuts posed a serious impact on industry.
Mike Kamungeremu, Zimbabwe National Chamber of Commerce president
“Production will be interrupted and industry will be forced to run on generators for those 12 hours and the impact of that on costs will be huge. Companies will most likely pass that cost to the final consumers and that could see prices going up.
“Those that do not afford the cost of running generators, will simply wait for power to come back and that will mean reduced production and that may lead to shortages of locally-produced goods.
“My heart bleeds for some manufacturers like those in manufacturing of plastics whose production processes do not need to be interrupted before completion otherwise all raw materials have to be thrown away. That will be disastrous for companies,” Kamungeremu said, adding that this will also impact the country’s growth targets.
He said Finance minister Mthuli Ncube’s revised growth target of 4,6 percent down from 5,5 percent may also be difficult to meet if the power outages persist.
“It is my sincere hope that what we have been told about Hwange 7 & 8 works nearing completion happens so that the additional 600MW becomes available,” he said.
This comes as the government said the first unit of the project was set for commissioning in November this year, while the remainder was projected to be complete by the first quarter of 2023.
Kamungeremu, however, said there was a need for business to invest in alternative energy sources and for the government to rope in small power producers.
Confederation of Zimbabwe Industries (CZI) president Kurai Matsheza said the impact of power cuts was huge on the economy.
“We can’t produce as a result of the power cuts. Unfortunately, we are at the mercy of the power utility. I can’t say what industry will do to have the situation rectified, the power utility must take us out of the situation.
“We could have dealt with the situation 20 years ago, but sadly it’s biting us into the foreseeable future. We can import electricity, but that is a temporary solution,” Matsheza said.
Kurai Matsheza, Confederation of Zimbabwe Industries president
He said the rolling power cuts were coming at a time when a number of businesses were seeking to ramp up production in the last quarter of the year.
“Companies will fail to meet their targets and the country’s economic growth projections are not going to be met. We are still trying to quantify the real amount of money that we have lost,” he said.
The Chamber of Mines of Zimbabwe chief executive officer, Isaac Kwesu said the widespread power cuts had also affected the mining sector.
“It’s something that has affected production. Mines have been forced to use alternative power sources such as generators, but they may not be able to meet the shortfall.
“If it continues, it will affect production targets, outputs, and export earnings,” Kwesu said.
He said the mining sector, industry and business were meeting with the power utility officials to deliberate on possible solutions to the power crisis.
“The alternative ideas on solutions will come from both the government and the private sector,” he said.
Mining companies were recently contemplating roping in independent power producers to ease the nagging power cuts that have hamstrung operations.
Mining firms are now turning to their own power generation to circumvent the crippling outages in the country.
Early this year, Zimplats, a unit of Impala Platinum, was granted licences to generate its own power as the firm seeks ways of cushioning operations from the erratic supply.
Caledonia Mining Corporation has commenced discussions with ZETDC to connect its US$14 million solar plant to the national grid.
Spokesperson for the National Consumer Rights Association, Effie Ncube, also said that the prolonged power cuts would result in reduced productivity, loss of jobs and incomes, price increases, and reduced investments.
“Without power, the economy will grind to a standstill. Reduced productivity will eat into any prospects of significant economic growth which was recently forecasted by the IMF (International Monetary Fund) and government.
“If the situation continues any longer the economy faces heightened chances of collapsing even further,” he said.
He further said that population and housing growth had outpaced power generation.
“… no significant new capacities have been added in years against a backdrop of reduction caused by collapsing ageing power generation machinery. As a result, none of our power stations is operating near full capacity.
“What is needed is for the country to increase investments into new and renewable sources of energy while repairing and expanding ageing stations to return them to near full utilisation. Imports from neighbouring countries also need to be increased from the current low levels due to shortage of foreign currency,” he added.
In a statement on Tuesday, ZETDC said the nationwide power cuts had been caused by a fault on the main grid that links Kariba and Harare.
The power utility urged citizens to use the power sparingly, warning of depressed generation at both Kariba South and Hwange Thermal stations.
The country requires over 2 000 Megawatts per day with regional imports, which require up to US$17 million per month, compensating the deficit,
Zimbabwe is working with Zambia on the Batoka Gorge hydro-electric power plant, which will produce at least 2 400 megawatts.
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