Dodia counsels govt on electricity tariff hikes

5 May, 2017

Dodia has warned of severe economic drawbacks if government continues to prioritise the needs of foreign investors at the expense of those of local investors.

Private Sector Development Association (PSDA) President and Economic analyst Yusuf Dodia has urged government to prioritise the needs of local businesses when contemplating hiking electricity tariffs.

In an interview with Lusaka Star , Mr. Dodia said the growth of Zambia’s economy rested in the hands of Zambians and not foreign investors, stressing that there was need for energy tariffs that would reflect the aspirations of many poor Zambians.

He said the move to increase electricity tariffs undermines the goal of growing Zambia’s domestic economy as most Zambians in the manufacturing industry do not have the capacity to pay for more than what they are already paying for energy.

“I am afraid this kind of logic does not make good sense for the Zambian economy because many Zambians who are in the manufacturing industry do not have the capacity to pay more than what they are already paying for energy because they do not have the money; therefore, this move completely undermines the mechanisms that are aimed at growing the domestic economy.

“If we want to grow our economy, we need to ensure that Zambians can buy energy at an affordable price so that they start manufacturing and building the economy,” he advised.

He cautioned government against the tendency of imitating policies from developed countries and observed that Zambia would not develop by blueprints of developed countries but by its own.

Mr Dodia added that the proposed electricity tariff hikes would likely throw most small medium enterprises (SMEs) in the manufacturing industry out of the business.

“The actual impact of this proposal is that many businesses in Zambia will cease to be competitive. So many SMEs and manufacturers will find it extremely expensive to manufacture something in Zambia. As a result, a lot of local businesses will move away from the manufacturing sector and concentrate on trade alone.

Listen to Mr. Dodia as he speaks to Lusaka Star Business

Recently, Zambia Electricity Supply Company (ZESCO) announced plans to increase electricity tariffs by 75 per cent this year alone.

According to the notice of the tariff adjustment, ZESCO stated that the increment would cover domestic, industrial and mining consumers.