Pressure to repay a Chinese loan of about $2 billion has forced the cash-strapped Zimbabwe Electricity Transmission and Distribution Company (ZETDC) to propose hiking electricity tariffs.
But business and residents have slammed the ZEDCT for proposing to hike electricity charges saying the move will only worsen the country’s economic woes.
Late last year, Finance Minister Patrick Chinamasa said China was exerting pressure on Harare to pay up its loans or risk being cut out.
Chinamasa told business leaders in Harare that Zimbabwe has had to pay millions of dollars to keep Chinese creditors at bay. Chinamasa said then “in the first six months of this year we have had to cough up $180 million, which was not in the budget, just to make ourselves look good.”
In a statement, ZETDC, a subsidiary of the Zimbabwe Electricity Supply Authority, said the intention is to procure additional power from both local and regional power producers and reduce load shedding.
ZESA spokesman, Fullard Gwasira told VOA Studo 7 that ZESA borrowed $2 billion to refurbish Hwange Thermal Station and Kariba Hydro Station and they have to raise money to pay for those developments.
Harare residents trust director Precious Shumba said residents are already struggling to settle debts from ZESA and the proposed increase means they will have to cut back on other basic necessities to pay for electricity.
Bulawayo Progressive Residents’ Association Coordinator, Roderick Fayayo said ever since ZESA introduced pre-paid meters it has increased tariffs a record four times but service has continued to decline.
Fayayo said the only improvement residents are seeing are increased perks for ZESA employees and new cars.
President of the Confederation of Zimbabwe Industries Busisa Moyo said that the tariff hike will increase the cost of doing business in Zimbabwe and will make the country less attractive for foreign investors.