Govt advised to delay effecting cost reflective electricity tariffs

Economic Analyst Yusuf Dodia

Government has been advised to consider delaying effecting cost reflective electricity tariffs amidst the current high cost of doing in Zambia.

Economic Analyst Yusuf Dodia says the directive by President Edgar Lungu to the Energy Regulation Board (ERB) and ZESCO work at effecting cost reflective tariffs is presently only academically positive and may not be so in reality.

In an interview with QFM, Mr Dodia has explained that effecting cost reflective electricity tariffs now when the economy is suffering a power crisis will only constrict economy.

Mr. Dodia foresees many of the companies in the country moving from manufacturing and value addition, to trading if the electricity tariffs are increased as suggested by the President.

He points out that a similar phenomenon was witnessed in European countries such as Germany.

Mr. Dodia explains Germany which was Europe’s biggest manufacturer now has seen its manufacturing processes moved to China because the cost of doing business is much lower in China.

Mr. Dodia states that Zambia therefore has an opportunity to learn from Germany.