Power outage results in losses
By BUUMBA CHIMBULU
LOSSES as high as K2 million were incurred by the manufacturing companies due to the five hour power outage experienced earlier this month, as this is detrimental to the growth of the industry.
Zambia on October 8, 2021 experienced a five hour blackout from 18 hours to 24 hours, which resulted in the manufacturing sector incurring losses associated with sales and production, among others.
This is according to the Zambia Association of Manufacturers (ZAM) Chief Executive Officer, Florence Muleya.
Ms Muleya explained that other than losses associated with sales, some companies experienced damages to their raw materials and machinery.
“The impact on the manufacturing sector for just this one day was that most of our membership made losses of not less than K500,000, even though some companies reported having made losses as high as K2 million,” Ms Muleya said.
Ms Muleya said in a statement that in a bid to cover the losses, some companies had to utilise generators, but were hit by no less than K50, 000 additional cost of production incurred through procurement of diesel.
She pointed out that this counter efforts to meet national objectives of increasing the share of the manufacturing contribution to the Gross Domestic Product (GDP) to 36.12 per cent.
She indicated that it also countered efforts of increasing exports of manufactured products as a share of merchandised exports to 71 percent by the year 2030 as stipulated in the Vision 2030.
Ms Muleya indicated that the manufacturing sector had strong linkages with the rest of the economy, stating that the effects on the sector could have a dire impact on the rest of the economy.
This could result in reduced distribution and market sales of smaller entities, slower industrialisation and job creation, as well as reduced availability of supplier development programmes which remain key agenda for the Government.
“Moving forward, ZAM recommends an increase in the forecasting capacity by the power utility company, as well as adopting early warning to the manufacturers.
“In a case where, nothing can be done to avoid a power cut, early warnings will allow manufacturing companies to be prepared and avoid damages, as well as ensure alternative sources of energy are readily available for their production lines,” Ms Muleya said.
Ms Muleya said this resulted into growth of 6.4 per cent of GDP in the manufacturing sector, in the second of quarter of 2021.
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Power outage results in losses
