The Centre for Trade Policy and Development (CTPD) has warned that Zescos’s decision to resume a four-hour load-shedding schedule from June to December this year will greatly affect the micro, small and medium enterprises.
Zesco has resumed its load-shedding programme due to a drop in water levels at its Kariba, Itezhi-tezhi and Kafue Gorge reservoirs.
The power utility also recommended immediate implementation of reduced generation at Kariba complex to levels recommended by the Zambezi River Authority.
But in a statement to News Diggers, CTPD executive director Isaac Mwaipopo regretted that the SMEs whose businesses were highly dependent on a steady supply of electricity would be highly affected because they do not have adequate capacity to easily switch to other sources of energy like larger businesses.
“CTPD is concerned with the recently announced decision by ZESCO to commence daily four-hour load shedding starting from June 1, 2019 due to low water levels in the major water reservoirs in the country. We are of the view that this development will contribute to further economic deterioration, and it is sad that this is happening at a time when we should be making all efforts to find ways and means to resuscitate the ailing economy. The biggest casualties when this happens will be the Micro, Small and Medium Enterprises (MSMEs) whose businesses are highly dependent on a steady supply of electricity. This is because they do not have adequate capacity to easily switch to other sources of energy as compared to larger businesses,” Mwaipopo stated.
“An immediate consequence of this will be a reduction in productivity in these businesses, which will further result in even slower economic growth of the country, given the significant role played by small scale businesses in job creation and income generation. In addition, the expected loss of business due to load shedding will most likely push the business to consider laying off some workers as a way of meeting losses. The commencement of load shedding will, therefore, further divert the economy away from the path of economic recovery. The effects of this move are likely to be worse than that which was experienced in 2015 when Zambia had a similar experience. This is so because at the moment, the country’s economy is already in dire stress. As such, this measure, though necessary, will only make the situation worse.”
Mwaipopo urged government to re-look its energy sector investment strategy, as the current plan did not seem to be yielding results.
“We must not forget that we as a country have not fully recovered from the effects of the slowdown in our economy experienced in 2015. Thus the situation we find ourselves in now raises more anxiety. In this vain, CTPD would like to urge the Zambian government to seriously consider relooking its energy sector investment strategy, as the current investment strategy does not seem to be yielding results in helping the country to avert the effects of power deficits triggered by poor rainfall. One alternative will be to consider investing heavily in solar energy. Biofuels as a source of energy could be another alternative the government should consider investing in. These alternatives will not only be cheaper but will also be more sustainable. The fact that we are alive to the challenges posed by climate change which will continue to affect us means we should adopt proactive strategies as opposed to being reactionary every time there is a problem,” stated Mwaipopo.
“Another recommendation we would like to make is for ZESCO to consider strategically implementing the daily four hours of load shedding in a manner that will not affect business for the MSMEs. It will save no purpose to load-shed the places where business takes place during the busy working hours when production is expected to be at its peak. The logical thing to do will be to consider load-shedding these areas during off peak periods.”