Zimbabweans paying just over half of what they should pay for electricity

HON. CHIKWINYA: First allow me Madam Speaker, with your indulgence.  If you listened to the first part of the Minister’s answer, it was elaborate and did not have time.  I therefore seek, with your indulgence that the Hon. Minister due to the importance of this matter brings in a Ministerial Statement outlying the cost structure of our power tariffs so that at least we can have more time to engage with him.

THE HON. DEPUTY SPEAKER:  I think the Minister has taken note of that.

HON. CHIKWINYA:  Thank you. The supplementary then follows as power has increased three times in the past six weeks at a rate of 50% per each time of increase.  May you relate to this House the rhythm that justifies such an increment, considering a stable auction rate of our RTGs as it trades with the US dollar?  How come you are saying the US dollar is being affected by inflation yet we are having a stable auction rate which has been around $81 for the past one and a half months?

HON. ZHEMU:  In terms of the increases that are being effected you might have noticed that the last increase which was done before the three successive increases of 50% was done in March, 2020.  By March, the current auction rate was not yet in effect and by then it was a 1:25 exchange rate.  So there was an erosion of the tariffs to the levels that ZESA was failing to pay for its liabilities and we were having some challenges in ensuring that the power utility survives.  By March the tariff was at an equivalence of US10 cents per unit but by September it had reached a very unsustainable level of US2.33 cents per unit and ZESA was now failing to execute its mandate.

Madam Speaker, one of the questions indicated that there are times when ZESA employees would request for support from the community or consumers to afford some repairs. This is what we want to avoid.  ZESA must be able to pay for its running costs…

THE HON. DEPUTY SPEAKER:  Hon. Members, those who are not on the floor please may you please mute your gadgets.  You may proceed Hon. Minister.

HON. ZHEMU:  Thank you very much Madam Speaker.  What ZESA is attempting to achieve is to get to sustainable levels.  As we speak, like I indicated for domestic, the tariff is at US6.33 cents per unit.  The level that is supposed to be achieved is around US10 cents.  Like I indicated, there are a number of varieties of costs that are incurred by ZESA in order to bring electricity to our houses.  For instance, there is importation and there is also internal generation by independent power producers who are being paid.  In all fairness, if ZESA is supposed to be running without loses like everybody here would want to see happening then the cost must be absorbed through the tariff and the tariff as we speak is still very low, it is at US6 cents when it is supposed to get to US10 cents, that is the optimum tariff that is supposed to be arrived it.

So, currently consumers must be happy because Government is subsidising both on domestic consumption and agriculture. Even on industrial consumption, there is still the aspect of a subsidy because it is still below the cost of generation, transmission together with distribution.   So, I submit Hon. Madam Speaker.

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