Zambia may double electricity prices as drought slashes supply

Zambia, Africa’s second-biggest copper producer, may double power tariffs as the government seeks more costly imports to offset a shortfall from its drought-stricken hydropower dams.

The southern African nation has an electricity deficit of more than 700 megawatts, about a quarter of total capacity, and wants to buy 300 megawatts from South Africa, Energy Minister Matthew Nkhuwa told reporters in Lusaka, the capital.

"I think it will be maybe double the amount, because we are paying half the amount that we are supposed to pay for electricity in Zambia," Nkhuwa said when asked about the price increase. Zesco the state-owned utility, is still determining the proposed new tariffs for consideration by the cabinet, and a final announcement will be made "soon".

The increase will fuel inflation, which in August rose for a fifth straight month to the highest level since 2016. A fall in farm output, which is also due to the worst drought in almost four decades in parts of the country, has already stoked consumer prices. And the spike in oil prices after the weekend attack on Saudi Arabia’s biggest oil plant will prompt a fuel price increase in Zambia, Nkhuwa said.

Zesco in March asked the energy regulator to more than triple tariffs, but the government rejected this. The last increase was 75% in 2017.

ZAR/USD
16.72
(+0.29)
ZAR/GBP
21.01
(+0.48)
ZAR/EUR
19.07
(+0.04)
ZAR/AUD
11.67
(-0.03)
ZAR/JPY
0.16
(+0.46)
Gold
1809.01
(+0.39)
Silver
19.23
(+0.66)
Platinum
827.48
(+0.14)
Brent Crude
42.17
(-1.20)
Palladium
1967.50
(+0.38)
All Share
55531.05
(-1.19)
Top 40
51235.09
(-1.23)
Financial 15
10528.08
(-1.64)
Industrial 25
75515.64
(-1.81)
Resource 10
53219.66
(-0.20)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
I'm not really directly affected
18% - 2071 votes
I am taking a hit, but should be able to recover in the next year
23% - 2676 votes
My finances have been devastated
35% - 4041 votes
It's still too early to know what the full effect will be
25% - 2894 votes
Vote