12 May 2017

Zambia: Zesco's New Tariffs to Affect the Poor - Research

A newly commissioned research has shown that the increased electricity tariffs by ZESCO will mainly affect the poor.

The research reveals that poorer households consume less electricity with average consumption of about 226 kilowatts each month, compared to 312 kilowatts used by richer households. The research was conducted by the Policy Monitoring and Research Centre, PMRC.

And PMRC Executive Director, Bernadette Deka, says while government's aim of reforming subsidies by the end of 2017 is the right move, care must be taken to protect the poorest, when subsidies are cut.

She says the research has also shown that in general, the richest Zambians currently receive nearly five times more in subsidies than the poor.

Deka says it shows that the wealthiest 20 percent of the population, receive approximately 70 percent of all subsidies, whilst the poorest 50 percent of the population, receive less than 3 percent of the subsidies.

She added that the research suggests that without alleviating measures, subsidy withdrawal could increase poverty.

Deka has called on government and the Zambia Electricity Supply Corporation, ZESCO to consider some options to alleviate the impact of the removal of the subsidies on the poorest households.

ZESCO has adjusted tariffs with its officials saying this will allow a lot of people to enjoy more units at the same price.

The proposed lifeline tariff simply allows customers consuming up to 300 units of electricity in a month, to pay only 15 ngwee per kWh (excluding monthly fixed charge and taxes), meaning that Zambian households can plan and control expenditure on electricity by keeping consumption to the lowest tariff band possible and implementing energy saving practices such as Switch and Save, CFL Bulb replacement, using alternative energy sources such as LPG cookers, solar geysers and solar lighting systems.

"While adjusting the tariff, we are very mindful that a lot of people can't afford the 75% tariff increase. And so we have a tariff called the lifeline tariff which is 100 units per 15 ngwee. We have applied to adjust that from 100 to 300 units so that a lot of people can enjoy that lifeline tariff at the same price," said Managing Director Dr Victor Mundende has said.

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