Tough times ahead for Malawians

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By Christy GOMANI

People in the country should brace themselves to dig deep in their pockets for food and services, unless ESCOM finds a way of lessening the persistent power shortages.

This warning is coming from economic think tanks who believe the power shortages may also limit investment, if alternative methods of power generation are not implemented.

In its latest publication, the Research Department of Nico Asset Managers is warning that resorting to more expensive sources of power may result in increased production costs, thereby exerting more pressure on non-food inflation.

Food security outcomes, it says, are expected to deteriorate during the lean season from October 2018 to January 2019 when food prices are at their highest and local cereal supplies are at their lowest, thereby leading to a buildup in food inflationary pressures.

Insufficient power supply may hamper economic activity in the country.

Power shortage may also limit investment if alternative methods of power generation are not implemented.

Resorting to more expensive sources of power may result in increased production costs, thereby exerting more pressure on non-food inflation, the report says.

In a recent public hearing on ESCOM’s application to the Malawi Energy Regulatory Authority on electricity tariff increment in Blantyre, ESCOM CEO Alex Chiwaya admitted that some companies are spending much on diesel generators in running their businesses due to continued power blackouts.

He cited one of the hotels in the country as an example of spending millions of money on fuel for generators.

To concur with his statement, the hotel which MERA held a public hearing in Blantyre ESCOM power went off twice during the day long session, one at the time of interview with MERA CEO and another occasion during a presentation by Dhruva Sahai, a World Bank Senior Financial Analyst, Energy and Extractives Global Practice.

The fear is the electricity situation with or without tariffs hike will force the production industry to raise prices of commodities hence making it unaffordable to the citizenry.

The Electricity Generating Company-EGENCO through its Senior Public Relations Officer Moses Gwaza has recently promised to have the Nkula A project finished by the end of this month which will add 12 megawatts to the national grid hence reducing the electricity challenges.

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