Moderate power price hike pleases industries

Post was last updated: October 4, 2018

By Chimwemwe Mangazi:

The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) has said it is pleased with the decision by the Malawi Energy Regulatory Authority (Mera) to approve a moderate tariff hike for the Electricity Supply Corporation of Malawi (Escom).

Mera on Monday approved a 31.8 percent four-year tariff hike for Escom which is 28.3 percentage points lower than the 60.1 percent the power utility firm had applied for.

In its base tariff application, Escom was requesting for a 53 percent power hike in the first of the four-year implementation period, a development analysts cautioned could crash the economy.

MCCCI Chief Executive Officer, Chancellor Kaferapanjira, said Tuesday the private sector is impressed with Mera’s decision.

“We noticed a number of inefficiencies that were incorporated in Escom’s request. Our efforts have, therefore, borne fruits as Mera, who we lobbied, did a good job in scrutinising the request.

“An increase was inevitable in order to achieve cost reflective tariff bit the extent of the increase was the issue to us. So, coming down from 53 percent to 20 percent in the first year is a plus to us,” Kaferapanjira said.

But the Centre for Social Concern (CfSC) has described the continued rise in electricity tariffs as inconsiderable and a mockery to the citizenry.

CfSC Economic Governance Programmes Officer, Lucky Mfungwe, said this comes at a time the government raised electricity tariff to borrow and manage generators which have been decsribed as a means of siphoning resources from the start at procurement stage to management of resources let alone a fuel gates.

“Despite all this, blackouts alarmingly continue in the country. This has affected the economy a lot in terms of both revenue generation by the government through the Malawi Revenue Authority (MRA) as most companies have downsized operations but also increased expenditure on fuel to run generators.

“This also has seen small-scale businesses such as barber shops, salons, welding shops and restaurants, just to mention a few, being negatively affected,” Mfungwe said.

He added that a recent salary survey showed that 82 percent of households that were interviewed lived below the cost of living of K151, 272.

“The average cost of electricity is at K7,714. The 31.8 percent increase translates to average an increase of K10, 105,” Mfungwe said.

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