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Zimbabwe robs private companies to pay electricity debts
SW Radio Africa ^ | 2005-10-10 | Violet Gonda

Posted on 10/10/2005 3:27:19 PM PDT by Clive

The debt ridden Zimbabwe Electricity Supply Authority (ZESA) has paid its arrears with counterparts in South Africa and Mozambique. The power utility is using the money taken from private companies by the Reserve Bank of Zimbabwe to pay up its debt. Experts say although the payments may reduce the power cuts in Zimbabwe the way the money is being sourced is going to sink the economy into deeper crisis.

A leading economist, John Robertson, has warned that there is going to be a build-up of scarcity of commodities and a huge surge of inflation as a result of bad economic policies being implemented by the government.

Robertson said Zimbabwe does have a fairly steady source of export revenue from the mining, tobacco, tea and coffee industries but exporters of these use half of their proceeds for their own requirements and are forced to surrender the other half to the Reserve Bank.

It is part of this money that ZESA used to clear outstanding debts of US$25m to Eskom of SA and US30m to Hydroelectrica de Cahora Bassa (HCB) of Mozambique, after receiving funding from the central bank. ZESA spokesman Obert Nyatanga is quoted as saying the power utility is now able to pay for its imports in advance. Nyatanga said Zimbabwe was importing 650 megawatts of electricity each week from Eskom, HCB and the Democratic Republic of Congo's Snel at between R22m and R25m.

Robertson warned, "Although it is important to pay for electricity, the government is merely diverting money from where it might have gone to pay for a wide range of things, only to now pay for just a few things." He said, "Releasing money to the central bank means that the money is not being used to buy scarce commodities. The effects of this are that this is going to force bidders to move deeper into the black market and increase inflation."

The problems at ZESA have in the past resulted in frequent power cuts which have not only affected households but crippled industry. The economist said although the payments by ZESA may reduce power cuts, simply importing power is not enough. He said this is because the country is failing to maintain its own power generating capacity and the ability of power stations to keep pace with the demands on them is not being maintained. "We will still see power cuts affecting us because of our own inefficiency."

At present Zimbabwe imports 35% of its electricity from SA, Mozambique, Zambia and the Democratic Republic of Congo.


TOPICS: Business/Economy; Foreign Affairs; Government
KEYWORDS:

1 posted on 10/10/2005 3:27:22 PM PDT by Clive
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To: blam; Cincinatus' Wife; sarcasm; happygrl; Byron_the_Aussie; robnoel; GeronL; ZOOKER; Bonaparte; ...

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2 posted on 10/10/2005 3:28:10 PM PDT by Clive
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To: Clive

Turn off the lights, Bob. Your party is about over.


3 posted on 10/10/2005 3:45:00 PM PDT by BigFinn
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To: Clive

How stupid can the leadership of one country be? These people are devils.


4 posted on 10/10/2005 4:02:59 PM PDT by Owl558 (Pardon my spelling)
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To: Owl558

Two countries, since South Africa is treading the same pth.


5 posted on 10/10/2005 4:03:58 PM PDT by dynachrome ("Where am I? Where am I going? Why am I in a handbasket?")
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To: Clive
Peter is gonna show up at Paul's door one day and want his money back. Then what?

Mugabe better have some big generators in that multimillion dollar mansion he has built for himself...and, gasoline storage tanks.

One day, the natives will storm that place and eat Mugabe.

6 posted on 10/10/2005 4:39:07 PM PDT by blam
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To: Clive
Image hosted by Photobucket.com you'd be hard pressed to DESIGN a better plan to destroy your own country than this blundering POS is doing...
7 posted on 10/10/2005 4:44:54 PM PDT by Chode (American Hedonist )
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