Industry, already operating at half its installed capacity
and reeling from low efficiencies associated with antiquated equipment and low
production, is becoming even less competitive.
Zimbabwe Congress of Trade Unions president Peter Mutasa
said workers are facing the threat of job losses as a result of power outages.
“It is a real crisis. Many workers are facing job losses,” Mutasa told the
Zimbabwe Independent last night. “Many workers are being forced to go on unpaid
forced leave because there is nothing for them to do as a result of the power
cuts. We are going to see widespread job losses unless the situation is
mitigated.”
Although the introduction of a new currency that is
relatively weak against the US dollar had given manufacturers an incentive to
look for new export markets, the power blackouts are shrinking exports and
worsen the forex crunch.
Apart from this, companies are incurring losses running
into millions of dollars with some firms on the brink of closure in stark
contrast to President Emmerson Mnangagwa’s mantra that the country is open for
business.
Foreign currency shortages, recurrent breakdown of aged
equipment, debt and severe reduction of water levels at Kariba Power Station
have contributed to the energy crisis in the past couple of months.
Zimbabwe imports electricity from neighbouring Mozambique
and South Africa. Owing to an acute foreign exchange shortage, the country has
failed to retire debts to South African power utility Eskom and Mozambican
power entity Hidroeléctrica de Cahora Bassa.
Zesa Holdings’ failure to honour its obligations to the
foreign suppliers has occasioned the drastic power cuts.
Eskom cut the power it sells to Zimbabwe from 450 megawatts
to a mere 50 megawatts. Government recently paid US$10 million to Eskom to help
facilitate talks for power supply to be restored.
Zimbabwe was producing 917 megawatts of power as of
yesterday against a capacity of 1 800 megawatts.
Confederation of Zimbabwe Industries (CZI) president Henry
Ruzvidzo said the power cuts have crippled industry and are a major threat to
its ability to export.
“The power cuts have affected business severely. The loss
of revenue runs into millions,” Ruzvidzo said. “In some cases export orders are
under threat due to lack of performance. The situation calls for urgent
solutions before irreparable damage occurs to our fledgling industries.
Discussions with Zesa and the Ministry of Energy are in progress to find both
short and long-term solutions.”
Confederation of Zimbabwe Retailers president Denford
Mutashu painted a grim picture of the state of the retail sector as a result of
the power cuts.
“The power outages are ravaging the sector. The impact has
been so drastic especially for those retail outlets operating outside the
central business district,” Mutashu said.
“Some retail outlets have generators but are struggling to
find fuel. You cannot have a situation where both fuel and power are not
available. This has affected machinery as well as the till points.”
Mutashu pointed out that some shops have closed their
bakery and delicatessen departments as a result of the power outages. He
revealed that shops have also reduced the purchase of perishables such as milk
and cold meats for fear of incurring further losses.
“Retail outlets are incurring huge losses such that some
are sending workers home until the situation improves as they come to work to
just sit and do nothing,” Mutashu said. “We are now bearing the brunt of the
corruption at Zesa and government’s failure to invest in alternative energy.”
Mutashu said they are still quantifying the total losses
caused by the load shedding but said the losses would run into millions of
dollars. He said negotiations with Zesa over the issue have not been helpful as
they have not resulted in the immediate end of power cuts.
Employers Confederation of Zimbabwe acting president Israel
Murefu said the power blackouts have had an adverse impact on business.
“The power outages have had a devastating effect on
business. You get power at 10 in the evening and it goes around 4 in the
morning, meaning we have to use generators but generators are supposed to be
for emergencies and not for everyday use. It is not sustainable by any means,”
Murefu said. “If a company was operating at 40% capacity before the power cuts,
can you imagine at what capacity it is operating at now. We have noted that
companies have reduced their head count and are operating well below capacity.”
Companies such as Waverley Blankets based in Graniteside
are contemplating closure.
“There is no light at the end of the tunnel. We have been
severely affected as a sector, and it (Zesa load-shedding) has affected our
operations,” Waverley Blankets administration
manager Doreen Eeson said.
“We are likely to be forced to close our doors.”
A printing company in the Graniteside industrial area in
Harare has decided to shut shop until the electricity situation improves
putting the jobs of more than 70 workers at risk.
“We cannot operate under these conditions. I cannot ask
staff to start work at 10pm and finish at 4am when electricity is available,”
the printing company owner said. “I cannot run a generator the whole day at a
cost of 20 litres per day and service charges of ZW$4 300. It is just
impossible, so we will have to close and wait until electricity is restored to
an extent of allowing us to operate normally.”
He said it is not only the monetary loss but also the
social implications of the power blackouts.
“The actual loss cannot be quantified just in monetary
terms. I have two pregnant senior employees. How do I put a value on them
failing to pay maternity fees?” he said.
Industry deputy minister Raj Modi came face-to-face with
the impact of power cuts at cooking oil manufacturer, Surface Wilmar.
Ordinarily, the company produces 8 000 tonnes of cooking
oil per month, but company executives told Modi this week during a tour of the
company’s plant that output had slumped to 1 500 tonnes.
“There is no production. As you went through the factory,
did you see workers there? Did you see the factory running? For the last 16 to
17 days, there has
been no production here,” Surface Wilmar executive
chairperson Narottan Somani said during the tour.
Some companies are spending up to ZW$100 000 monthly on
diesel for generators as the crisis worsens.
The farming sector has not been spared the impact of load
shedding.
“We have not done a full analysis of this situation but I
can confirm that there are heavy losses in the wheat sector which are being
caused by these prolonged power cuts,” Zimbabwe Farmers’ Union executive
director Paul Zakaria revealed.
“We had a meeting with our provincial and district officers
and the situation on the ground is that farmers that rely on irrigation are
really suffering due to persistent power outages and this is seriously
decreasing production.”
The mining sector has also borne the brunt of the
nationwide power deficit with production statistics for the first four months
of 2019 showing that all key minerals recorded output declines of not less than
10% compared to the same period in 2018 due to power outages. Mining companies
have bemoaned the power cuts, which have resulted in them going between four to
seven days without power. This has increased the use of generators.
“The use of diesel generators, which are expensive to run,
has led to an increase in the cost of production impacting negatively on the
viability of the mining industry. The immediate implication of this is a
decline in foreign exchange earnings from the mining industry and, if the
situation is not resolved, we will witness some marginal mines closing their
operations in the next few months,” immediate past president of the Chamber of
Mines and Bindura Nickel Corporation managing director Batirai Manhando told
the Zimbabwe Independent in a recent interview.
As a result of the dire state of affairs, the government
has directed that the mining sector and hotels in Victoria Falls pay their Zesa
bills in foreign currency despite phasing out the multi-currency regime last
month through Statutory Instrument 142 of 2019.
Economist Prosper Chitambara said the current power outages
will deter investment which the country desperately needs.
“The power outages are an increase on cost of doing
business. Most businesses are relying on using generators which is expensive.
There has been a significant reduction in production,” Chitambara said,
“Investment prospects have been affected. Energy is attractive to investors. If
there is no energy, who would want to invest?” Zimbabwe Independent
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