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Gono, Zesa ducking the issues

THERE is an egotistic war of words between the government and Zesa on one side and the Reserve Bank of Zimbabwe on the other over tariff increases.

Central Bank governor Gideon Gono is opposed to steep tariff hikes say

ing they will be inflationary while Zesa wants to effect hefty increments to cushion the parastatal from the high cost of generation and distribution of electricity.

Since the beginning of the year, letters have been flying to and fro between the protagonists, each trying to justify their standpoint.

It is a power game enacted by public officials whose egos appear to blind them to the real issue at stake, which is that the country is in a power crisis.

Raising tariffs steeply or suppressing the rate of increase is only addressing the symptoms of a crisis that has been left to get out of hand by a government clutching at straws to extract support from an increasingly impoverished populace.

We sense in the correspondence flying between the central bank, Zesa and government an unwillingness by the parties to break the impasse and move forward.

This is not the first time we have seen public officials grappling among themselves in a pretentious bid to appear to be addressing a national crisis.
 
The central bank has tried to impose various measures on industry to curb the foreign currency black market and ensure the resource is traded in the formal economy.
 
It introduced the ill-fated Homelink system, it has fought and is still fighting with exporters over forex retention thresholds, and it has put in place myriad controls to ensure the currency does not continue to waste away.

The currency is still losing value by the day, the black market is still flourishing and forex receipts are still too insufficient to finance imports.

Inflation is still heading north and is soon expected to reach 1 000% — if it hasn’t already. This is part of the problem requiring urgent attention.

There is no political will to address the supply side of foreign currency by putting in place policies which ensure that Zimbabwe gets balance-of-payments support while at the same time creating a conducive environment for investment and expansion of industry and the resuscitation of agriculture.
 
The same feverish activity has been witnessed in the fuel sector where marketers have battled over prices of a commodity that is not available.

Taskforces and think-tanks were formed to deal with pricing and distribution but this came to nought because the supply side was not addressed.

The same exercise in futility has today taken Zimbabwe to the depths of absurdity by trying to extract fuel from jatropha trees.

It is definitely easier to import petrol and diesel than to squeeze it from plants, common sense denotes.

The fight over tariffs falls in the same realm of energy being expended to achieve temporary results. Industrial and domestic consumers of electricity are today prepared to pay reasonable tariffs as long as they are guaranteed uninterrupted supply.

Electricity supply is not going to improve immediately because of a new tariff regime. Zimbabwe needs to revamp the energy sector to attract significant investment in hard currency to refurbish Hwange and Kariba power stations.
 
A deal was signed with the Iranians last year to overhaul Kariba but Zimbabwe has not met its side of the bargain, US$30 million in all, because the money is not there.

There is also no money for the greenfield Batoka Gorge project.

The cold season is nigh and farmers will in the next four weeks be watering fields of winter wheat.
 
Inevitably electricity demand will increase exponentially.

It should be borne in mind that Zesa is failing to supply power to industry that is operating at barely above 40% of maximum capacity.

The cold season and demand from farmers will expose the folly of the current fight.
 
There is no obvious plan in place to improve power imports or to boost generation.

There will be more frequent power outages and the same pugilists will still be blaming each other for the crisis — all in pursuit of the title of “saviour of Zesa”.

They are not saviours and their record of failure is all-too-apparent to be missed.

The unbundled Zesa has created a behemoth which cannot fend for itself and Gono cannot ascribe the 782% inflation to power tariff hikes.

Is anyone looking at the bigger picture?