Business has warned that the debilitating power crisis that has hit Zimbabwe is crippling the manufacturing sector and exposing consumers to potential price hikes ahead of the festive season.
Firms, as well as households, are experiencing prolonged unscheduled power cuts of up to 18 hours daily resulting in reduced production and the use of expensive diesel generators by some companies.
The Zimbabwe National Chamber of Commerce CEO Christopher Mugaga told Business Times that the current electricity crisis has undermined local industry’s competitiveness. Mugaga said:
The power crisis is making us lose a competitive edge to imports as our products will become more expensive than before.
If there will be shortages, certainly there will be increased smuggling of cheap imports into the country thereby weakening the industry.
Certainly, those goods with high demand will continue to be needed hence the business will continue to produce it even at high cost and sell it at a high cost.
ZNCC chief economist Jeff Makiwa said most companies in the mining and manufacturing may close because of the power crisis. He said:
The deepening energy crisis will further dress down economic growth and most companies, especially within the cold chain, mining, and manufacturing are more likely to close shop if the current energy situation is prolonged.
Confederation of Zimbabwe Retailers president Denford Mutashu said:
The power crisis will affect the local industry in the sense that most businesses will go for cheaper options to meet the festive season demand hence expensive local goods uptake will be reduced.
Meanwhile, economist Eddie Cross recently suggested that there appears to be no plan from the government on the power crisis. Cross said:
We have a power crisis. I went to see the President in January this year and told him in emphatic terms that if he didn’t address the power situation it was going to stop our economy in its tracks.
He (Mnangagwa) asked me to come back and I found four Ministers waiting for me. The President told them the private sector says we face a power crisis, what is the plan? There was no plan, no plan.
The President turned to (ZESA chairman) Dr Gata and said to him Sydney what are you going to do and he said Mr President, ZESA doesn’t have the financial capacity to fix this problem.
Our utilities are broken and the national utilities do not have the capacity to invest in infrastructure and new capacities. What are we going to do?