Zimbabwe consumers will pay 50% more for electricity usage after national supplier, the Zimbabwe Electricity Transmission and Distribution Company raised tariffs to help it stay afloat.
The utility has warned that without higher tariffs it won't be able to properly maintain its ailing infrastructure. The need for repairs on generators at Hwange Thermal Power Station which constantly breakdown because of old age has meant Zimbabwe has had to endure repeated bouts of load shedding.
This week, gold miner RioZim blamed a 39% drop in production on "acute power cuts which resulted in depressed milling throughput."
Two weeks ago, Lovemore Chinaka, the acting managing director of ZETDC told the Parliamentary Portfolio Committee on Energy and Power Development that charging the previous tariff of approximately 2.3 U.S. cents per kilowatt-hour (kWh) would result in failure to maintain the national grid.
“The long-term impact would be that we will be unable to fix the grid from a maintenance point,” Chinaka said.
Commenting on the new tariff, Confederation of Zimbabwe Retailers president, Denford Mutashu said electricity is a major cost driver and should not come as a shock increase as is the case now.
"We were anticipating a gradual increase. A shock jump normally has a negative impact on sentiment and the cost of doing business," he said.