Power outages to cripple industry

HARARE - The looming intensified power cuts in winter will knock Zimbabwe’s ailing industry, particularly manufacturing sector, to its knees, Confederation of Zimbabwe Industries (CZI) has warned.

CZI said the development will also dampen industry revival efforts.This comes as Zimbabwe Electricity Distribution Company (ZETDC) — a subsidiary of Zimbabwe Electricity Supply Authority — said it will escalate load shedding in the forthcoming winter to handle increased demand.

Zimbabwe’s embattled manufacturing sector — operating at 44 percent capacity — is struggling to stay afloat after succumbing to a decade-long economic crisis. The industry is already battling 24-hour-long power cuts and failing to access lines of credit or fresh capital among other challenges.

“In view of the impending winter period, every effort should be taken to ensure increased power supply,” said CZI chief economist LorraineChikanya.

“If the appropriate framework and environment to allow this to happen is created through the regulator, it may be one of the solutions to alleviate shortages of this nature,” she said, adding that CZI had for long advocated for private sector participation in direct power importation. She said the pending increased power cuts will “leave industry on brink of collapse.” Last week, ZETDC announced that Zimbabwe will be experiencing 624 megawatts (MW) daily shortages.

It indicated that the country’s key power stations are expected to produce 1 226MW in addition to imports of 250MW against peak winter power demand of 2 100MW.

Traditionally, the country experiences high power demand due to electric-powered wheat irrigation. CZI contends that the manufacturing sector has been decimated with the few remaining players battling to compete against cheaper imports.

“In the process of regaining competitiveness, one of the key components is that industry needs affordable and reliable power supply. Failure to do get this can only prolong the recovery process or completely decimate some of the sectors,” said Chikanya. Economic experts have warned that the country’s manufacturing sector remains the cornerstone of future growth prospects.

Linda Masterson, managing director of clothing retailer Edgars, has said Zimbabwe and the continent should shift focus to the development of the manufacturing sector.

“The only way for Africa’s rising is on the back of manufacturing. Chinese factories are going to be very busy producing for the Chinese market. If we want to be the next place, the next recovery, the next China, we have to change our mindset (towards manufacturing),” she said.

Independent economist Eric Bloch has also said government must ensure that import tariffs are imposed at levels which would eliminate that unfair and unjust competitive advantage “If government is genuinely intent on a substantive recovery of the economy, and of achieving ongoing real growth, with the concomitant reduction of nationwide poverty, creation of employment and meaningful national well-being, all of these hindrances to the success of the manufacturing sector must be urgently and constructively addressed,” he said. - Business Writer

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