The Centre for Trade Policy and Development (CTPD) has observed that local businesses are failing to sustain their operations because of the current erratic supply of electricity in the country.
Speaking in Lusaka at a breakfast meeting organized by the Zambia Tax Platform (ZTP), in conjunction with the Civil Society Poverty Group, CTPD Executive Director Isaac Mwaipopo said load shedding has hampered the operations of many local businesses in Zambia.
“A number of businesses are closed and others are on a stand still due to low productivity and low profit making leading to retrenchments of workers,” Mwaipopo said.
Meanwhile, CTPD Researcher Bright Chizonde noted that pronouncements that were presented in the 2020 national budget have the potential to revamp local businesses.
“If only government sticks to the plans in the 2020 national budget, there is a high possibility that the local businesses will prosper in the next fiscal year,” he said.
And ZTP chairperson, Leah Mitapa, observed that local businesses’ failure to sustain their operations was not entirely as a result of the energy crisis.
Mitapa said climate change and high exchange rates on the market were other conditions that made local businesses fail to sustain their operations amid the current economic challenges.
“High exchange rates have also negatively affected how sustainable local businesses are, leading to government necessitating the statutory reserve ratios (SRR) by the Central Bank,” she said.
She has since appealed to civil society organizations to offer solutions to various problems the country is experiencing unlike blaming everything that happens.
Statutory reserve ratio is a situation where commercial banks are required to hold deposit liabilities due to inflation threats caused by the exchange market.
Zambia’s current statutory reserve ratio has been revised from current five per cent to nine per cent effective December 23, 2019.
Zambia is currently facing an energy deficit of over 800 megawatts, a situation that has necessitated long hours of load shedding in the country.
The Zambia Electricity Supply Corporation (ZESCO) has attributed the shortage of electricity to inadequate water to generation electricity at its hydro-electricity stations.