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MacDonald Dzirutwe

* Sharp tariff hike for consumers grappling with inflation

* Price increase expected to improve power generation

* Hopes for quick economic recovery yet to materialise

By MacDonald Dzirutwe

HARARE (Reuters) - Zimbabwe hiked its average electricity tariff by 320% on Wednesday to ramp up power supplies at a time of daily blackouts, but the move will anger consumers already grappling with soaring inflation that is eroding their earnings.

The southern African nation is experiencing its worst economic crisis in a decade, seen in triple-digit inflation, 18-hour power cuts and shortages of U.S. dollars, medicines and fuel that have evoked the dark days of the 2008 hyperinflation under late President Robert Mugabe.

The second increase in the price of electricity inside three months follows sharp rises in fuel and basic goods prices in the last week. But salaries have not kept pace, prompting citizens to blame President Emmerson Mnangagwa’s policies for the crisis.

The Zimbabwe Energy Regulatory Authority (ZERA) said it had approved an application by Zimbabwe Electricity Transmission and Distribution Company (ZETDC) to raise the tariff to 162.16 cents (10.61 U.S. cents) from 38.61 cents.

ZERA said the tariff hike was necessary after inflation soared - the IMF says it was about 300% in August - and due to a plummeting Zimbabwe dollar currency, which was re-introduced in June.

The currency has since then lost 58.61% of its value against the U.S. dollar on the official market and more on a thriving black market.

Consumers seem set for more increases after the energy regulator said starting November, the power utility would index its tariff to the U.S. dollar to enable it “to recover from inflation and exchange rate changes.”

The new tariff would allow ZETDC to raise money to repair its generators, as well as pay for imports from South Africa’s Eskom and Mozambique which cost U.S. $19.5 million every month, the regulator said.

Hopes that Zimbabwe’s economy would quickly rebound under Mnangagwa, who took over after the late Robert Mugabe was deposed in a coup in November 2017, have faded fast as ordinary people grapple with soaring inflation which has eroded earnings and savings.

On Monday, treasury data showed the economy was worse off than initially thought as it is projected to contract by up to 6% this year due to the power cuts that have hit mines, industry and homes and an El Nino induced drought that has left the country needing to import food.

Mnangagwa, who critics accuse of lacking commitment to political reforms and using his predecessor’s heavy-handed tactics to stifle dissent, has pleaded for time and patience to bring the economy back from the “dead.” (Reporting by MacDonald Dzirutwe; Editing by Toby Chopra)

Doctors protesting in Harare ...

Zimbabwe’s Labour Court has ruled that the Ministry of Health should make further submissions in a matter in which it is seeking a determination on the 36-day industrial action by local doctors demanding higher salaries and improved conditions of service.

Striking doctors on Monday defied a government ultimatum to return to work.
Striking doctors on Monday defied a government ultimatum to return to work.

According to Doug Coltart, an attorney representing the Zimbabwe Hospital Doctors’ Association (ZHDA), the government failed to make clear arguments in the Labour Court on why it is seeking an order to declare the strike either legal or illegal in terms of the local labour laws.

Coltart told reporters in Harare soon after court proceedings that the government should place a full record of today’s proceedings and other issues in court by Wednesday for a full hearing.

He claimed that the state attorney conceded that the doctors’ industrial action was a result of incapacitation and not a strike.

“The minister determined the preliminary point but failed to give reasons as to why she issued a show cause order. So, the matter has been sent back to the minister, number one to give reasons on why she issued the show cause order and number two to give a full record, to place a full record in court. So, what we are expecting in that record are full minutes of the hearing before the Labour Court including oral evidence which was backed by Dr. (Tawanda) Zvakada (ZHDA acting president) about the incapacitation of doctors.

Protesting doctors in Harare ...
Protesting doctors in Harare ...

“Doctors are saying we are not on strike, we are not unwilling to go to work but we are unable because we are incapacitated. That evidence was not laid before the court by the minister. The second thing what we are expecting to see in those minutes is that a concession was made by counsel for the Health Service Board to say that indeed doctors are incapacitated but they should go back to work anyway because other civil servants are doing so. With respect, once you make that concession that indeed doctors are incapacitated that’s the end of the matter. It’s not a strike, the doctors are simply unable to go to work.”

He said the Labour Court has made a determination that the necessary documents should be filed in the court Wednesday so that they can be inspected before a hearing is held on a date yet to be determined.

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