HomeBusiness Digest2015: Zimbabwe’s darkest year since 2009

2015: Zimbabwe’s darkest year since 2009

In the early 90’s, small potholes made headline news with Zimbabweans demanding immediate action from relevant authorities.

Taurai Mangudhla

This was the same with power supply, where notices for minor faults were announced to the public. Regular updates were given, including on routine maintenance that disrupted electricity supply.

Zesa Holdings would be forced to account to disgruntled customers, fuming over faults that caused darkness for as short as 30 minute outages. However, poor service delivery has now become the norm with authorities not bothering to explain in most instances.

Even residents have gradually abandoned the culture of reporting faults, registering complaints or enquiring about the quality of service delivery, apparently embracing the new culture of shoddy service delivery.

For Zesa, it is not a case of failure to maintain infrastructure as is the case with the city councils, but a mere lack of capacity.

Inadequate capacity to meet local demand, coupled with a generally poor management, on the part of Zesa, has made 2015 the darkest year in Zimbabwe’s recent history.

The country’s existing power stations are currently generating less than 1 000MW against peak demand of 2 200MW. Although the country imports power, it still leaves a huge supply deficit, forcing the country to resort to alternative sources of energy.

It has become the norm at analysts’ briefings or in financial statements for companies to include information on how they intend to cope with the incessant power supply, including details of the cost of acquiring and running generators.

Last month, agro-processing firm National Foods announced it would spend US$10 million in the 2016 financial year, with US$2,3 million allocated towards the purchase of generators to provide back-up power supply to some of its major manufacturing sites.

At homes, Zimbabweans have invested in battery-powered lights, solar lights and gas for cooking and generators.

Amina Kachisi, a Harare-based small -scale poultry farmer, said she had been recently forced to relook at her business model due to excessive power cuts.

“I have been in this business since 2005 doing 100 chickens before I grew my capacity to about 5 000 a month, but I have never experienced such problems with electricity,” Kachisi said.

“My chickens are now costing me more to produce because I run generators at night for an average of five hours per day because we get electricity after 10pm. We have now resorted to selling the birds live, in cages because hundreds of birds went bad in freezers due to this now bizarre load shedding. The problem is that it costs me more to transport the birds to the market and this takes a toll on my margins.”

This comes as Energy minister Samuel Undenge said major mining companies and other large electricity consumers would have to reduce their electricity consumption by up to 25% to reduce massive power cuts.

Undenge in October told parliament large-scale users who are mostly big miners such as Mimosa, Unki, Zimplats, Zimasco and ZimAlloys were to be asked by the power distributing arm of Zesa, ZETDC, to drop loads by 25%.

By its own admission, Zesa said it has inadequate capacity to produce electricity and meet national demand, resulting in load shedding.

“Since 2007, the country experienced load-shedding as a result of the shortage of capacity in the country,” said Zesa on its website.

Zimbabwe National Chamber of Commerce (ZNCC) CEO Chris Mugaga said the impact of power cuts has been quite significant, particularly on the costs structure of businesses and cuts across industry.

“I have been to a number of factories and observed they run on generators the greater part of the day. This is a problem because the factories say generators cost on average 2,5 times more than electricity,” said Mugaga.

“The cost of running a bank branch is higher outside the CBD because there is no electricity and this cost is piled on to interest fees. The impact of power cuts in 2015 has been felt in reality, and in terms of perception. Tangible impact is that people have more costs and then in terms of perception, people will just think before they invest.

Imagine (Africa’s richest man Aliko) Dangote wants to set up a cement plant here and he is thinking there is no electricity so he needs power.

How can Dangote come and build a power plant before his core business?” He said power cuts have impacted negatively on the country’s ease of doing business rating and affected imports due to delays at border posts when they have no electricity.

Load-shedding is a controlled temporary way of cutting power to parts of the country when there is not enough electricity to meet the needs of customers.

Zesa said on a typical work day, demand for electricity starts increasing from 2am in the morning, climbing steadily as people wake up, get ready for work, open shops, factories and offices. Between 7am and 10am, the system experiences its morning peak load.

“The load then eases off until the evening peak. Demand starts to increase from 4pm when people return home and switch on televisions and stoves. Between six and nine o’ clock, the system experiences its evening peak load,” said Zesa.

The power utility assured customers they would not go for more than five hours without electricity during load shedding, but reality on the ground is that customer go for as long as 18 hours a day without power.

Zimbabwe’s power crisis has been exacerbated by the plummeting water levels at Kariba Dam which has reached an all-time low.

Kariba water levels plunged to 16% last week from 52% the same time last year based on Zambezi River Authority figures, spelling doom for the imploding economy.

Kariba Hydro Power station, which at peak has a generation capacity of 750 megawatts (MW), a significant contribution to the country’s power grid, is currently producing about 450MW out of a national aggregate production of 966MW.

The situation is seen deteriorating further next year as experts warn of poor rains in areas that feed into Kariba dam.

Already Zimbabwean industry is reeling from the excessive power cuts saying they are cripping operations. Zimbabwe’s industry capacity utilisation dipped from 36,5% in 2014 to 34,3% this year.

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