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Alba Iulia
Thursday, August 6, 2020

FDD hails President Lungu’s clamp on Zesco tariffs

Economy FDD hails President Lungu’s clamp on Zesco tariffs

zesco

The Forum for Democracy and Development(FDD) has applauded President EDGAR LUNGU for approving proposals by ZESCO Limited to freeze domestic consumer tariffs for the next 24 months and to adjust commercial consumer tariffs to make them cost-reflective.

FDD Copperbelt Chairperson YOTAM MUTAYACHALO says the move should be supported because it is pro-poor.

Mr. MUTAYACHALO says Zesco domestic tariffs are unreasonably high and beyond the reach of many Zambians.

The opposition FDD leader said it is unfortunate that the majority of Zambians have no access to power despite having many water bodies.

He wonders why Government has allowed Zesco domestic energy users to subsidize huge commercial conglomerates such as mines.

Mr. MUTAYACHALO, who is also former National Energy Sector and Allied Workers Union- NESAW General Secretary, said this in a telephone interview with ZNBC News in Kitwe today.

He has also supported calls by President LUNGU to split some Ministries.

Mr MUTAYACHALO says the splitting of some Ministries such as Mines and Energy into two wings would create effectiveness in the public service.

President LUNGU has announced that he will soon make structural changes to some ministries starting with the splitting of the energy and mining portfolios currently combined under the Ministry of Mines, Energy and Water Development.

The President will also split the Ministry of Communications and Transport, Works and Supply into two to improve operational efficiency.

6 COMMENTS

  1. How do you just freeze…this why these organisations end up not making a profit and being subsidised. ..why is Zesco not investing in alternative energy like solar…the Rwandan electric company recently a massive solar energy farm to supplement their grid…what the president needs to is sack the entire board of directors and the CEO who has been there forever and bring in fresh brains. …advertise those vacancies there are so many capable Zambians at home and in diaspora who can move that company forward.

  2. In making tariff decisions you look at the elasticity in the sectors and looking at the commercial and residential, the more elastic in pricing, the more sensitive the price adjustment
    Its also an income distribution for the economy an increase matched with an increase in commodity and service prices its important to understand therefore the cost structure in sectors and do may be an absorption tariff pricing across the sectors to ensure a win win situation otherwise it becomes a cry for those and a restructuring
    Sometimes you promote and activate those sectors and achieve that tariff cost reflective by looking at the tariff scenario in volumes and elasticities maximising your income

  3. A pricing differential sometimes is an edge to grow and ensure maximising the economic potential profiting from those at the same time volumes and tariff are also critical to break even and sell through

    Shifting the budget line means shifting someone’s and someone must accept the externality somehow and elasticities therefore becomes a critical decisioning matrix

  4. Sometimes pricing should be developmental developing those clusters in sectors and MFEZ appropriately at the cost of doing business without taking on the inefficiencies or compensating those entrepreneurial not effectively running their businesses to fit the industrial/sectorial norm
    Pricing with a developmental agenda in those sectors graduating the tariff to match the growth in those sectors helping the majority Zambians not trained in entrepreneurial to have some income to meet the tariff

    Its like understanding the sectors in development, their sensitivity to pricing adjustment and balancing the income distribution between firms and individuals creating wealthy for the country

  5. And electricity is at the centre of the growth factor in many countries trajectory

    Others progress in achieving double digit growth is being hampered by poor supply of electricity and inadequate capacity

    Its what Zambia should use to whooo investment and use the stability of power and capacity as the tool of investing in Zambia///

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