CONFEDERATION of Zimbabwe Industries (CZI) and ordinary Zimbabweans yesterday warned that the continued increase in electricity tariffs will trigger a hike in cost of production, resulting in the spiking
of prices of goods and services.
They warned this would derail government’s thrust to maintain economic stability after it introduced a foreign currency auction and several measures in June that have seen the local currency firming against major currencies and more stable prices of goods.
This comes after Zesa Holdings announced another whopping 50 percent increase in electricity tariffs with effect from November 1, the third such hike in two months.
In an interview with the Daily News yesterday, CZI president Henry Ruzvidzo said although the increase was justified, Zesa must do it gradually.
“There will be some movement in the inflation basket. Our energy supply mix still has a heavy reliance on imported power although generation at Kariba is improving and will assist to reduce pressure on cost,” Ruzvidzo said.
“The staggered review, while heavy for many businesses, is necessary to assure supply with minimal disruptions. “The currency reform process has unfortunately been a bumpy one and adjustments of costs in many areas have tended to lag behind currency developments and inflation.
“Stability in macroeconomic fundamentals is important to minimise distortions which can cause harm to economic activity.”
Ordinary people who spoke to the Daily News said the increase would bring more misery to long suffering Zimbabweans.
“We were surprised to hear that tariffs have increased again. If you take into consideration what people are earning you will see that the power tariffs are too high.
“We have seen prices of goods stabilising in the past few weeks, but with tariffs going up, we are afraid that prices will also go up,” said Stewart Muchefa of Chitungwiza.