Sunday, July 14, 2024

Electricity shortage and its impact on small businesses


Small Business Using Electricity to make Steel Frames
Small Business Using Electricity to make Steel Frames

By Melony Chisanga

The current energy deficit in Zambia has caused a lot of disturbances in the economy because energy plays a critical role in economic development.
Currently, Zambia faces a critical energy shortage that has crippled both formal and informal businesses.

Load Shedding, unannounced power-cuts and fuel shortages have characterised Zambia’s economy with both domestic and commercial customers struggling to acclimatise to the new order.

In many places across Zambia, both large and small scale businesses have slowed down on production as they have to work only when there is electricity.

In many homes, Zambians are now living in ‘darkness’ as most areas are going for an average of eight hours without electricity. This has forced residents to resort to alternative energy sources such as charcoal, solar, gas stoves, generators and candles to provide energy.

According to the Zambia Development Agency (ZDA) energy profile on Zambia, energy sources in Zambia include, hydro power energy which comprises of electricity and renewable energy which comprises of solar energy, biomass energy, wind energy, and geothermal energy and petroleum products.

Zambia is self-sufficient as it has substantial unexploited reserves of these forms of energy with the exception of petroleum which is wholly imported into the country. However, a number of challenges are still looming around the energy sector. One major challenge that the sector is facing among others is the electricity deficit.

According to the ZDA, Zambia’s power deficit is estimated at 560MW and the country is now relying on importation of power to cushion the current electricity shortage that has hit the country very hard.

The biggest power utility company ZESCO is projected to suffer a revenue loss of about of US$227 million as a result of this deficit. The lack of investments in to the sector and the need for transparency in policy implementation in the sector remains also remain another challenge that needs to be further interrogated.

However, the government has started importing electricity from a ship docked in Mozambique at the cost of over US$18 million which has proven to be unsustainable and remains a huge cost to people.

Hydro power is the main energy source of electricity in Zambia after wood fuel, contributing about 10 percent to the national electricity supply.

The current power deficit is attributed largely to the lack of investment in generation capacity in the last 20 to 30 years despite the huge potential in hydro resources. It is estimated that Zambia possesses 40 percent of the water resources in the SADC region and has about 6,000 MW unexploited hydro power potential, while only about 2,177 MW has been developed.

With this in mind, this author went to interview a number of domestic customers and small scale entrepreneurs in selected townships of Lusaka to discuss the impact of the current electricity shortage.

Boniface Mwaba is a small scale entrepreneur who owns Smart Barbershop in the heart of one of Lusaka’s Matero Township.

Mwaba says the current power-cuts being implemented have caused his business to lose income because of the long period when there is no energy to power his shaving machines.

“I have lost a great deal of income because of loadshedding. I am losing a lot of my loyal and regular customers because our work has become inconsistent. We need constant power to be able to keep up in this business. Buying a generator is expensive and hard to maintain,” he said.

The intensifying levels of loadshedding have forced domestic consumers to resort to alternative sources of energy such as charcoal and gas stoves.

But environmentalists are concerned as this has adverse effects on nature and can increase the effects of green house gases.

Energy experts and particularly, ZESCO Limited have made a lot of pronouncements on how best the country can handle the current electricity crisis, but Mwaba feels there is too much procrastination on resolving the energy shortage.

“There is a serious need to address this load shedding in Zambia because our sources of income have deteriorated such that we are failing to provide for our families. It looks like our experts and ZESCO Limited have not really explained what is happening to the inconsistent supply of electricity,” Mwaba said.

Mwaba’s sentiments are echoed by another entrepreneur George Mawele who operates a welding business.

“We can no longer survive if we depend so much on electricity alone as our source of energy. There is need for diversification in energy. I am forced to go for other sources of energy such as a generator to supply power but this is difficult because fuel needed to run the engine is not only expensive but it is also in short supply,” he said.

One of the biggest challenges to the energy shortage in densely populated areas is that schedules for the power-cuts are not consistent. This has made it difficult for consumers to plan their activities.

“The load shedding timetable is not followed here. So it’s very difficult to plan. We always have power-cuts without notice. Sometimes we have power only in the night when it is not conducive to work,” he said.

According to Mawele, it is hard for any business to progress in the midst of long hours without electricity.

“My business cannot grow because power is main backbone of my business. Eventually, it is difficult for the economy of the country to grow, “he said.

And Joyce Katongo who sells groceries at Mandevu Market is concerned about the deteriorating levels of socio-economic conditions and increasing levels of poverty in Zambia because of the energy shortage.

According to Katongo, there is a relationship between increasing levels of poverty and electricity shortage.

“The prices of commodities and services have increased because of lack of energy. In some cases, these goods and services are not available because production has failed arising from shortage of electricity. In this age and era, poverty increases because development has become dependent on the availability of energy,” he said.

The wholesale prices of goods and services have increased at the height of electricity shortage. For instance, millers have increased the price mealie meal, Zambia’s staple food because of production costs inspired by electricity scarcity.

By and large, the energy deficit that Zambia faces needs concerted efforts to address because it has caused major challenges on the local economy.
Many consumers at domestic and commercial levels are losing income because of the shortage of electricity in Zambia.

It is important that sustainable ways of providing energy are devised because the status quo also has effects on the environment as people tend to resort to alternatives that hurt the environment.

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