By PETER SICHALI
THERE is need to revise electricity tariffs downwards so that they are affordable to an average local business, Patriots for Economic Progress (PeP) president Sean Tembo has proposed.
Mr Tembo said the unstable and unaffordable supply of electricity, which was a key production input was one of the major contributors to the continued fall of the Kwacha against major convertible currencies.
“The diminishing productive capacity of the economy due primarily to the unstable and unaffordable supply of electricity, which is a key production input, must be addressed,” he said.
Mr Tembo said the country had experienced the largest increment in electricity tariffs at the same time that it had seen the most unstable supply of the commodity.
He said the situation had caused the economy’s productive capacity to significantly diminish and several businesses failing and shutting down.
“In order to address this problem, it will not be enough to only increase the country’s electricity generation capacity, but revise electricity tariffs downwards,” he said.
Mr Tembo said: “The argument of comparing local tariffs to those in the region by first converting them to US dollars is cyclic, because our continued loss of productive capacity causes the Kwacha to depreciate which makes our electricity tariffs appear to be reasonable in US dollar terms, when in fact not.”
“We believe that the third major contributor to the continued fall of the Kwacha against major currencies is the inadequate leadership at the Bankof Zambia,” he added.
He said the recent statement by the BoZ Governor, Mr Christopher Mvunga, that he had stabilised the Kwacha at K20.31 to the US dollar speaks volumes about the true extent of his failure to understand the current economic malaise.
“It must be noted that one of the key roles of a central bank Governor is to exude confidence in the financial markets in particular and the economy in general,” he added.
By PETER SICHALI