"Zimbabwe Industry Will Be Greatly Affected By Power Cuts In South Africa" - Industrialists

1 year agoMon, 26 Sep 2022 05:49:31 GMT
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"Zimbabwe Industry Will Be Greatly Affected By Power Cuts In South Africa" - Industrialists

Zimbabwean industrialists have said power cuts in South Africa will have a negative impact on the Zimbabwean industry.

A Chamber of Mines of Zimbabwe (CoMZ) executive said South Africa’s power crisis had emerged as the worst blow against the country’s ambition to build a US$12 billion mining economy.

He said industrial capacity utilisation rates projected at over 60% this year were under threat as firms will cut production. The Independent cites the CoMZ official as saying:

Production will be disrupted if no imports are available to augment power shortfalls.

Now that South Africa has power shortages, their ability to export power to countries like Zimbabwe will be diminished. South Africa will most certainly augment their power by sourcing from the region.

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This will put pressure or competition on other alternative power suppliers in the region, pushing up the tariff because South Africa is a big country. Their power deficits are far bigger than ours.

We will end up importing power at a higher tariff from the region and our plans to expand production will be equally affected.

Zimbabwe imports about 150 megawatts (MW) of power from South Africa to augment the subdued output from its ageing plants and other imports from at least three Southern African neighbours.

Last year, ZESA spent US$225 million on power imports from regional utilities, including in South Africa, according to official data.

But there have been cutbacks since South African utility Eskom announced drastic reductions in generation of up to 2 400MW.

ESKOM announced last week that it will roll out stages 3 and or 4 this week as the power crisis deepens.

On the domestic front, the past five months have been disastrous for Zimbabwe with blackouts lasting about 12 hours a day.

There is still no hope for a solution in the near future after Finance minister Mthuli Ncube told reporters last week Monday that further cuts may be announced in November as he takes into consideration emerging economic dynamics.

On Saturday 24 September 2022, the local power utility, ZESA announced increased load-shedding citing technical challenges at the countries’ power generators.

Authorities, however, hope that blackouts would be curtailed once the first of the two new generating units at the Hwange is brought on line in November. Unit 7 is expected to pump 300MW into the grid.

But Christopher Mugaga, chief executive officer at the Zimbabwe National Chamber of Commerce (ZNCC), said elevated blackout levels were “spill-over effects” of problems confronting South Africa. Mugaga said:

It is compromising the quantity of power to Zimbabwe. And even if Hwange 7 and 8 are brought on line, we will still feel the impact of power shortages in South Africa because this will have an impact on the cost of importing power from the entire region. Zimbabwe will pay more, we remain vulnerable.

Confederation of Zimbabwe Industries (CZ) president Kurai Matsheza said the importation of finished or processed goods may be curtailed and spur Zimbabwe manufacturers.

Matsheza’s remarks were echoed by Oswell Binha, chairperson at CEO Africa Roundtable, who said since South Africa is Zimbabwe’s biggest trading partner, all inputs from there will be delayed.

Economist Chenayi Mutambasere also echoed the sentiments above.

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