Minister of Energy David Mabumba says it is inevitable for government to increase electricity tariffs as the sector will die as no investors are interested in it in its current form.
Speaking today at the Patriotic Front Interactive Forum, Mr Mabumba disclosed that the proposed 75 percent tarrif increase was a national emergency.
He disclosed that government has been subsidizing over $500 million annually.
Mr Mabumba explained that Zesco actually spends more than they generate. He said Zesco imports electricity at 12.9 cents per kilo watt but yet sells at 3.3 cents per kilo watt forcing government to subsidies this difference.
“It is just that Zesco has been a very strong parastatal otherwise we would have forgotten about it because the amount of subsidies that government has been topping up is so huge that Zesco are not able to generate internal funds for them to invest in the system,” Mr Mabumba explained.
He noted that sadly this in the short term would have an impact on the cost of living but pointed out that the long term goal would be productive for the whole nation.
He emphasised that the current electricity tarrifs in Zambia were not cost reflective and thus have been turning away investors.
Mr Mabumba noted that the PF government still wanted to protect the consumer and to start with this increment will only be felt when consumers use above 300 units.