In addition to a weakened economy and high drought effect, Zimbabweans might be shut out from electricity supply if its electricity supply authority failed to pay off bills to Eskom.
South Africa’s electricity supply company Eskom has given the Zimbabwe Electricity Supply Authority (ZESA) until the end of May to honor its increasing debtor face a national power outage. Zimbabwe receives about 300MW of electricity under a non-binding agreement with Eskom.
The country also draws its electricity supply from Mozambique’s Hydro Cahora Bassa which is used to augment supplies from Kariba Hydro Power Station and Hwange Thermal Power Station. It has also emerged that electricity generation from the Mozambican power plant will be reduced.
But because of the country’s cash flow crisis, leading to its high debt, companies supplying power vows to cut the country off the power supply. While the Mozambican power plant plans to reduce its power supply to the country, South Africa’s Eskom vows cut power supply to the country if it fails to pay up its shortfall of approximately R1.078 billion.
“ZESA has not been able to adhere to this repayment plan. The balance as at end of March 2017 according to the plan should have been R484 721 980, but the actual balance was R603 176 479, leaving a shortfall of approximately R118 454 499,” Eskom said in a letter to Zesa chief executive officer, Josh Chifamba.
Disconnecting Zimbabwe’s electricity supply will cause more havoc to the nation’s weakened economy as more businesses and industries will fold and productions will be crippled. However, according to government officials in Zimbabwe, the Finance Ministry and the Reserve Bank of Zimbabwe are working on a number of initiatives to raise the money and pay Eskom before the end of this month. This includes asking mining companies to pay in advance while the central bank will also mobilize funds to pay for the power imports.
Since the collapse of the Zimbabwean dollar in 2009 during a period of hyperinflation, the country has been using a mix of different foreign currencies — and most importantly U.S. dollars. This affected the flow of cash in the country with citizens being unable to access their monies from most of the country’s banks. This also affects the country’s economic productivity. In fact, the collapse of Zimbabwe’s economy meant that people have to buy everything from bottled water to toothpicks from abroad, and that means cash is constantly flowing out of the country.
“We need to ensure that we retain our position as an exporter of agricultural commodities and other essentials to ensure that cash flows inbound,” said independent economist John Robertson Adding electricity failure will no doubt finally cripple the country’s economy and make life a living hell for citizens.
In Africa Meanwhile, ZESA chief engineer, Josh Chifamba, acknowledged the local power utility was having financial difficulties but said things were under control. “We are getting support from the Reserve Bank of Zimbabwe and some of our customers who are into exports, particularly ferrochrome ones,” Chifamba was quoted as saying.
“We are confident that the issue will be resolved in good time to avoid disruption to power supply. It’s under control.” Zimbabwe consumes more than 1,400MW per day .