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Zambia power sector to add $2.57bn.to GDP

Time Posted: March 23, 2011 5:30 am

THE Zambian electricity industry is expected to contribute US$2.57 billion to the country’s gross domestic product (GDP) by 2015 from US$1.30 billion due to increased mining activities.

The electricity industry has developed following increased mining activity and currently consumes 50 percent of the country’s generated capacity, Frost and Sullivan energy and power system’s research analyst Salima Zyambo has said.

“Ever since the government opened the mining industry to foreign investment, it has grown tremendously,” he said.

Mr Zyambo told Marketwire, a US electronic public relations publication, that success of the mining industry has rippled into other industries such as manufacturing creating a number of opportunities for the electricity industry.

Marketwire states that despite the market boosters, low foreign direct investment (FDI) and electricity tarrifs could restrict the market’s expansion.

“The fast-paced growth of Zambia’s economy is expected to cause power demand to outstrip supply which will make it imperative to increase the country’s installed capacity,” he is quoted as saying.

Mr Zyambo further states that Zesco’s inability to generate funds internally due to sub-economic electricity tariffs makes the state utility heavily dependent on FDI for power infrastructure construction projects.

Mr Zyambo noted that increasing electricity tariffs and further improving investment incentives for potential investors will improve FDI inflow into the country.

“Providing potential investors with inducement and raising tariffs such that they are cost-reflective will go a long way in attracting the much needed FDI,” he says.

The research finding also says that reduced tariffs may prevent foreign investors from investing in construction projects, which stops the establishment of capacity enlargement projects.

“The success of the industry has rippled government’s goal of achieving 66 percent electrification by 2030”, he told Marketwire.

[Zambia Daily Mail]

3 Comments

  1. vote
    flag Condused says: Condused
    March 23, 2011 at 6:03 am |

    For How long shall we continue talking of the mining sector. Clearly we have failed to earn much from it and even if we did that can never last. What is important is to follow in Mwanawasa’s footsteps. Agriculture! We need more Agricultural policies and not fluke bumper harvests.
    This RB administration is only claiming victory now, what are they planning for our future??
    There is no serious action for our future, Copper will be a thing of the past at the rate the foreign investors are digging, and what will happen next?
    We need more agricultural policies and we need factories and industrialisation.
    The problem with Zambians is we just want to complain about wrong issues, no political candidate even mentions setting up industries and factories

    Reply
  2. vote
    flag Nostradamus says: Nostradamus
    March 23, 2011 at 1:09 pm |

    #1 good comment.
    And Zyambo, your college research is good, but it won’t help us with anything. We don’t like MMD’s mining policies. And what is $1.something billion dollars to a country.

    Reply
  3. vote
    flag "PAMWE CHETE" says: "PAMWE CHETE"
    March 23, 2011 at 2:28 pm |

    Mr. Zyambo your research is good but what is obtaining on the ground is very different. Our situation is very imperfect. That amount money if realised and going to the treasury this country will be heaven on earth. As usual guys like Pro. Clive Chirwa have spoken enough how we can add value to our copper nobody seems to be heeding that free and valuable advice. Even political wise PH and UPND could not heed wise advice. In Zambia just like our neighbour north Congo DR. we do the opposite.The only difference is that we have not experience serious civil strife.

    Reply

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