Fears that extra Zim load-shedding will be death knell for industry

The setback comes as the Zimbabwe Electricity Transmission and Distribution Company, a subsidiary of cash-strapped Zimbabwe Electricity Supply Authority Holdings, started implementing increased electricity load shedding, which has meant most parts of the country go 18 hours without electricity daily.

Load-shedding follows the reduction in capacity at the Kariba hydro-electric power station, from 750 megawatts to 475 megawatts, because of the decline in water levels in the Kariba Dam in the country’s drought-hit north-west.

Zimbabwe produces a total of 1 345 megawatts (MW), which is only half of its peak demand, forcing local industries to use costly diesel generators to keep things running.

Government officials disclosed recently that since independence in 1980 government had not invested meaningfully in the energy sector, leading to electricity shortages being commonplace in the past 15 years.

Addressing Parliament recently, energy and power development minister Samuel Undenge said leading mining companies and other large electricity consumers would have to reduce consumption by up to 25 percent.

All industries – from confectionary to mining – are bearing the brunt of the worsening outages.

President of the Bakers Association of Zimbabwe Givemore Mesoemvura said bakers were now facing serious challenges. Power cuts had already forced them to use diesel to power machines, which was expensive. Mesoemvura said some bakeries had already been forced to close shop.

“All the sectors of industry are affected by power cuts. At the moment we are managing to contain the costs but with time we will not manage,” he added.

Another industry on its knees is mining which, at its peak, was Zimbabwe’s leading industry, contributing 27 percent of export trade. Output has fallen by 60 percent with power problems being a large contributing factor. Mining firms have also had to contend with indigenisation regulations that compel foreign-owned firms to concede a large portion of ownership to locals.

Chamber of Mines chief executive Isaac Kwesu said: “Without power, the mining industry is doomed.” He has challenged the power utility to prioritise supply to key industries, especially mining, to avoid potential closure of mining companies, scaling down of operations and loss of jobs.

Confederation of Zimbabwe Industries president, Busisa Moyo, noted that lengthy hours without power was a threat to all businesses. “Load-shedding threatens to reduce the output of the few industries still operating,” he said. “This will see companies cutting back on expansion projects meant to create jobs.”

Unemployment in the southern African country is estimated to be above 80 percent. More than 20 000 jobs have been lost over the past two months after a court ruled that companies could dismiss workers by giving them three months’ notice.

The Zimbabwe National Chamber of Commerce (ZNCC) has warned that the current power cuts further deterred investors. Political problems and contentious economic policies over the years mean the country already struggles to attract direct foreign investment.

“The power cuts are seriously affecting industry and therefore the latest load-shedding schedule is repellent to potential investors,” ZNCC chief executive Christopher Mugaga said.

Crispen Mugova, the organisation’s chairman for Matabeleland, previously an industrial hub, said it was manufacturing that was suffering the most. “Each time power is cut off, companies involved in synthetic products lose out as stock for the day goes to waste. Bakeries too,” said Mugova.

Reports suggest the manufacturing industry is losing at least 20 percent of production time daily due to increased power cuts, a situation that might see capacity utilisation in some companies plunging to below 25 percent. Capacity utilisation for most companies is already down to between 30 and 35 percent.

The power crisis is just one of many problems Zimbabwe has faced since the turn of the century. Recurrent droughts mean that about 1,5 million Zimbabweans, more than 11 percent of the population, would require food aid this year.

Agriculture, mechanisation and irrigation development minister Joseph Made said the power shortages would exacerbate a difficult situation in a country that is struggling to revive industry.

“Can you imagine a seed company using generators to dry seed and still expect to remain in business or sell the product at profitable prices?” Made asked rhetorically. - ANA-CAJ News

(File photo: Gallo Images)