Despite â€œunbearableâ€ high electricity tariffs following a 63.52 percent hike, there is little authorities can do as this results from the recent 49 percent devaluation of the kwacha, an activist has said.
Consumers Association of Malawi (Cama) executive director John Kapito on Tuesday observed that while Malawi remains one of the darkest countries in Africa, the association expects government to push for reforms at the Electricity Supply Corporation of Malawi (Escom) if the hike is going to be meaningful.
But a human rights activist, Billy Banda, said the justification Minister of Finance Ken Lipenga made when presenting the national budget last Friday for the hiked tariffs only benefits the industry, not local Malawians who access electricity for domestic use.
Presenting the national budget, Lipenga said energy is the lifeblood of industry and that immediate reforms are needed to create a conducive environment for scaling up capacity. He said in pursuit of this goal, electricity tariffs were increased by 63.52 percent so that revenues in the sector are close to covering costs of production.
Lipenga said the move is towards a more market-determined tariff structure in the electricity sector.
But Banda argued government is more focused on industry than individual Malawians who use electricity for household purposes. He said it is worrisome that electricity is becoming unaffordable.
Kapito said most of the inputs that go into power generation and distribution are in US dollars and any devaluation of the kwacha has huge implications on the bills paid in local currency. He said Malawi is going through hard time to generate and distribute enough electricity.
Kapito said the recent kwacha devaluation justified the increase of tariffs because it was impossible for Escom to maintain the old tariffs given the economic circumstances it found itself in.
The Cama boss said when government decided to devalue the local currency, it was clear the effects were going to be devastating on consumers.