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Electricity infrastructure & ICTs: Zesa’s 31% tariff increase

The Zimbabwe Electricity Supply Authority (ZESA) has come up with what it believes is a grand plan to vanquish power cuts (also known as Load Shedding) from the great lands between the Limpopo and Zambezi river. After much thought and strategising, the engineers and boffins at the parastatal have come to the conclusion that a 31% increase of tariffs is the answer.

According to an announcement by the company on Thursday last week, the new pricing of 9.3c per Kwh (Kilowatt hour) will apply as of September 1 2011. The current pricing consumers have been paying is 7.5c per megawatt-hour. Despite the increase, Zimbabwe will still have the lowest power rates in the region.

For the local ICT sector to live up to justified expectations (both locally and continentally), power supply will play a significant role to make this possible. With that said a tariff increase is not an issue per se, provided consistent and accountable services are provided. In an era when Zimbabwe’s talent laden diaspora is beginning to trickle home and undersea cables like SEACOM & EASSy are fueling internet access, power supply is one of the missing pieces delaying the puzzle’s completion. Zimbabwe has what it takes to be an ICT services hub, very few dispute this fact. However data centers, a BPO sector, and other ICT support services cannot function in the dark.

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This sector (more than any other) is directly dependent on consistent power supply. While there has been constant talk of Zimbabwe’s abundant mineral wealth as a core revenue generator, its real potential can be found in the knowledge economy – this after all is the information age. It is therefore not surprising that a recent article by GigaOM on why the developing world must treat IT as a natural resource has the following statement:

IT solutions for nation building require a substantial amount of computing power, storage, and networking assets. It is imperative that these efficient technologies are made available to the second and third world. Lack of capital and the prevalence of aging, arcane power infrastructure are even bigger obstacles than access to cutting-edge technology. Every single Gigahertz, Gigabyte and Megabit must be maximized.

For a company enjoying a monopoly, ZESA has failed to take advantage of its status. It could be possible that raising prices was the last or only scapegoat to what some observers define as gross mismanagement. In June this year the company announced an expansion and fundraising plan under the watch of international auditors, KPMG. While not leading towards immediate improvements, this move is very significant in reviving investor and consumer confidence.

Five independent power producers were also licensed by the Ministry of Energy and Power Development in February this year. The move is expected to double Zimbabwe’s current power output from a capacity of 2,000 Mega Watts (MW) to a collective capacity of 4, 540 MW within the next three to four years. The country’s current power requirements amount to 2, 700 MW.


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2 thoughts on “Electricity infrastructure & ICTs: Zesa’s 31% tariff increase

  1. Why is it 30 years after independence we stil have one ORGANISATION supplying power,economy strives on competion and im sure if they wre 5 companies doing tht ZESA will have say mbare (Just an example) as their only customer

  2. Are we Zimbabweans all dumb ???? ZESA are just short of money because meters simply DO NOT turn during load shedding.

    Their solution is to raise the price by 31%, or roughly the amount time we are switched off. So their income will be as if they were performing at 100% Are they building a new Kariba or Hwange by year end?, next year end? I don’t think so. So who are they fooling by saying with this increase our problems will soon be over? Us dumb Zimbabweans ?

    Zesa – get your funding from a bank like eveyone else, not from your long suffering customers. We will be charged more for less until we pay everything for nothing……….

    Anyone remember the zimdollar ?

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