By Frazer Bwalya Musonda
In June of 2015 I stumbled upon a video on YouTube (link attached) of an interview of the then deputy minister of Mines, Energy & Water Development Charles Zulu at the Africa Energy Forum held in Dubai. Aside from his uncoordinated responses, he highlighted the potential that Zambia had energy wise and emphasized that this remained relatively untapped because of lack of funds.
But was that really true considering the huge debt that we have contracted so far?
Zambia has accrued so much debt in the last few years under the PF government, particularly for “infrastructure development”, an undertaking that is evidently riddled with corruption. The recent legal battle that the former minister of infrastructure, Ronald Chitotela faced and eventually got acquitted of based on a technicality shows just a bit of that. Everybody knows he was guilty. Even under strong circumstantial evidence the president could only transfer him to another ministry, but that is another topic all together so I leave it there.
Conventional wisdom holds that borrowed money should be invested into economic activities that simultaneously provide a service and generate revenues to support debt repayment. This “debt-profitable investment” nexus is but a myth under the current PF government. Huge sums of monies have been borrowed minus a well laid down plan for its application beforehand. Its “bamudala bakasaka kandalama” who decides- without regard to economics-which constituency gets to have a road or a hospital and which doesn’t. Documented cases are in the public domain of instances were these borrowed monies have been misapplied during induced by elections to buy votes. And as much as people like to praise late president Sata, he and Hon Chikwanda were the architects of debt contraction that was deficient of well laid down plans for its application.
The PF government has argued that economic development minus good road infrastructure is not possible. Nonetheless, they are yet to furnish the public with information on how exactly investment decisions into road infrastructure are informed. My personal view is that more than 60-70% of the roads that have been done, no cost benefit analyses were conducted. How can one otherwise explain why township roads have been done in almost all PF held constituencies and literately none in opposition strongholds? Mazabuka, a place where I lived for over a year is proof of this line of thought.
My contention with the implementation of the PF road infrastructure program is that most of the township roads that have been done-aside from sidelining important areas in opposition strongholds and being riddled with corruption-have only been done to please voters regardless of economic benefit analyses. A lot of borrowed monies that could have been used to fund capacity expansions in energy infrastructure have unfortunately been misappropriated principally because of incompetent people in the corridors of power.
The shortage of power to fuel economic activity was documented as one of the reasons for the drop in growth of the Zambian economy in 2015. The same has never been said when some township roads never existed. In addition to the slowed economic growth, we spent huge sums of money ($40 million) over 3 months in order to cushion the electricity rationing that resulted from reduced output from hydro power plants. A KWH of electricity was bought at 18 USD cents, heavily subsidized and later sold at 5 cents to Zambian consumers. This huge expenditure would have been avoided had there been careful planning from leaders. Clearly investing into capacity expansion must be a priority area. To think that we are just about to spend a lot more on electricity imports in 2019 when we were supposed to learn from the 2015 experience is testament to the incompetency of the current government.
Contracting external debt of over $10 billion (over 40% of GDP) for “economic diversification” and then counteracting that with lack of investments into sustainable power generation is more than enough reason to get rid of the PF government. The argument that the only option that makes sense to invest into considering the very low electricity prices in Zambia is hydro power, no longer holds once we externalize the effects of climate change when doing investment calculations. Based on data from EIA, the reduced load factor for hydropower in 2015 (0.53) due to reduced water levels and the solar hours of 2800 that Zambia enjoys annually, Solar PV energy becomes cheaper to invest into relative to hydropower by 20%. The levelized cost of generating electricity from solar PVs would stand at 4.4 US cents per KWh in this scenario.