HARARE (Reuters) - Zimbabwe’s state power transmission company said on Thursday it would increase its electricity tariff by 19.02%, effective March 1, citing rising inflation and a weakening exchange rate.
The southern African nation, which is enduring daily power cuts lasting up to 18 hours, last increased the tariff by 320% in October, saying this would help increase supplies.
At the same time, the International Monetary Fund says Zimbabwe’s economic reform agenda is off-track, and that without further donor support the risks of a deep humanitarian crisis were high.
Zimbabwe is struggling through its worst economic crisis in a decade, with prices of basic goods soaring and shortages of medicine, fuel and electricity worsening. Hopes of a quick recovery under President Emmerson Mnangagwa are fading.
“The government that came to office following the 2018 elections adopted an agenda focused on macro stabilisation and reforms ... but is now off-track as policy implementation has been mixed,” the IMF said in a statement outlining the conclusion of its latest Article IV consultation with Zimbabwe.
It added that delays and missteps in foreign exchange and monetary reforms had failed to restore confidence in Zimbabwe’s new currency and the government’s reengagement internationally on debt arrears was still delayed, constraining its access to external support.
Last June Zimbabwe ended a decade of dollarisation, fuelling inflation which economists estimate reached 525% in December.
Without an increase in donor support, the IMF said, Zimbabwe had a high risk of humanitarian crisis, with more than half of the population without food security, another poor harvest expected and growth in 2020 projected at near zero.
Zimbabwe also has a severe drought that has severely hit supplies of staple grains such as maize and further pushed their price up. The worsening poverty is upsetting the fragile calm experienced since the 2017 coup that toppled long-time ruler Robert Mugabe. (Reporting by Emma Rumney; Editing by Grant McCool; reporting also by MacDonald Dzirutwe; editing by David Evans)