• They promised that they are going to lower the cost of electricity.
• Government cannot create jobs if they are talking about cost-reflective tariffs.
• What is important is to restructure Zesco and ensure that there is no political influence.
An Energy Expert has urged government to reverse plans to introduce cost-reflective electricity tariffs as proposed in the 2022 national budget.
Speaking in an interview with Money FM News, Yotam Mtayachalo said there is need for government to reduce the cost of electricity in order to support the growth of Small and Medium Enterprises (SMEs).
Mr. Mtayachalo noted that when electricity tariffs become expensive, it will be difficult for government to create jobs for young people.
“They promised that they are going to lower the cost of electricity, now they are talking about cost-reflective tariffs. When the PF government increased electricity tariffs by 200 percent, I mentioned to say that was unprecedented in the history of the electricity industry in the world because electricity drives the engines of development.”
“Now when you make electricity to be very expensive, you are killing jobs. How is government going to create jobs if they are talking about cost-reflective tariffs? How can you grow SMEs if the cost of electricity is high?” Mr. Mtayachalo wondered.
He stated that government should instead restructure Zesco Limited and ensure that there is no political interference in the management of the firm.
“I think what is important is to restructure Zesco and ensure that there is no political influence. Zesco is able to run profitably and efficiently if we divorce politics from it. The problem we have in Zambia is that whoever becomes President there is a new Managing Director at Zesco and new Directors, you cannot run a company like that,” he stated.
Meanwhile, Mr. Mtayachalo advised government not to compare Zambia with other African countries with regards to electricity generation because their sources of power are totally different.
“I have heard people talk about cost of electricity study, but Zambia and these other countries in Africa the sources of power are different. Some countries use power from nuclear which is expensive, other countries use coal to generate electricity, so Zambia’s power generation is the most cheapest form of electricity.”
“You can’t compare Botswana which does not have a power station because it pays more for electricity then you want Zambia to pay for more electricity, if South Africa pays more for electricity you also want Zambia to pay more I think that is not how an economy is run because the per capita income also differs and Gross Domestic Product also varies from country to country,” he said.
During the presentation of the 2022 National Budget, Finance and National Planning Minister Dr. Situmbeko Musokotwane said government will implement cost-reflective tariffs in order to attract investment within the electricity sub-sector.
“In the electricity sub-sector, tariffs are not cost reflective hence the low private sector investment,” Dr. Musokotwane said.