Mthuli Ncube raises electricity tariff

Zimbabwe government has introduced new power tariffs aimed at capacitating ZESA to mobilize requisite resources through appropriate and cost recovery tariffs implemented through a differentiated scale.

In the short term, Finance Minister Mthuli Ncube said the power supply deficit can only be met through power imports.

Presenting his budget mid-term review, said the government approved the following electricity tariff measures for immediate implementation.

"The current electricity supply situation retards all our stabilisation gains and require urgent interventions to improve power supply to our productive sectors," he said.

The electricity tariff for Non-Exporting businesses will be increased from an average of ZWL9.86c/kWh to an average of ZWL45c/kWh (approximately USc5/kWh). The electricity tariff for domestic consumers be increased from an average of ZWL9.86c/kWh to an average of ZWL27c/kWh (approximately USc3/kWh), which is subsidized.  

The electricity tariff for Agriculture consumers be increased from an average of ZWL9.86c/kWh to an average of ZWL27c/kWh (approximately USc3/kWh), which is subsidized.

Maintain the tariff for ferrochrome smelters and other miners at US$0.067/kWh and US$0.0986/kWh, respectively, and ensure that the resources are ring-fenced in a Special Account solely for purposes of importing electricity; and ZESA be allowed to bill all other exporters and foreign currency earners in foreign currency and ensure that the resources are ring-fenced in a Special Account solely for purposes of importing electricity.

The responsible ministry and the Zimbabwe Energy Regulatory Authority (ZERA) will give the necessary implementation details.

In addition, other urgent measures for sustainable power supply evolve around management through rapid role out of pre-paid and smart meters and embracing energy saving technology, speeding up ongoing reforms including restructuring of ZESA to improve efficiency and management of the parastatal and implementation of planned medium to long term projects.

He said, drought has reduced hydro-electric generation at Kariba Dam, reducing power supply to unsustainable levels as reflected through severe load shedding.

Key Highlights

Revised fiscal framework
-    Total revenues for 2019 are projected at ZWL$14.06 billion, comprising:-
-    Tax revenue amounting ZWL$12.75 billion;
-    Non-tax revenues of ZWL$1.312 million;
-    Total expenditures for 2019 are projected at ZWL$18.62 billion comprising: -
-    Employment Cost ZWL$5.56 billion;
-    Capital expenditure ZWL$7.08 billion;
-    The revised 2019 Budget Framework will result in a reduced budget deficit of just 4% of GDP

The 2019 Supplementary Budget proposes additional provisions and reforms mainly related to the following priority areas:

-    Stimulation of production, targeting agriculture, industry and other productive sectors;
-    Food security, including;
-    Grain procurement to mitigate the effect of drought conditions;
-    Funding for the 2019/20 Summer Cropping Programme
-    Welfare of civil servants and pensioners;
-    Social services delivery and social protection;
-    Infrastructure and utilities;
-    Constitutional requirements including transfers to provincial councils and local authorities under Governments devolution thrust and enhanced support for governance institutions;
-    Supporting ongoing structural and governance reforms; and
-    Support for Government operations.