Power cuts in Zambia threaten big and small business

Intermittent power supply threatens Zambia’s key sectors of economic growth with business owners experiencing regular power cuts that they say are eating into profits. Mining companies operating in Zambia’s copper belt recently agreed to reduce power usage by between 10 and 15 percent to ease pressure on the national grid after water levels at hydro-electric plants dropped due to drought.

LUSAKA, ZAMBIA (REUTERS) – Mercy Phiri pours diesel into a generator so she can switch on the appliances for the day. Phiri is the manager at a restaurant in Lusaka, Zambia.

Business has not been good lately, she says. Thanks to frequent power cuts in the city she ends up spending more on fuel and charcoal to run the kitchen, which pushes expenses up and slows operations down.

“The problem with the load shedding is that we are experiencing… it’s affecting us a lot due to… we are even getting our salaries maybe on the 15th or 20-something. The idea of using charcoal when we are here, the place is not very conducive,” said Phiri.

Africa’s second-biggest copper producer cut its power generation by 300 megawatts in May after water levels in dams dropped following a prolonged drought.

On the other side of town, workers at the Kasumbi welding centre are racing against time to get client jobs done before the power goes off.

Cephas Kasumbi runs the business that makes grill doors and window frames. He says hours of power cuts have almost put him out of business and he now makes losses of about 700 US dollars a month.

“We can work maybe from 0800hrs to 1200hrs — there is no power, then sometimes from 0700 to 1600hrs no power, so if there is any way maybe government can do, or if they can do something to stop this load shedding issues, I think they can help us,” said Kasumbi.

Zambia’s power generation capacity stands at 2,200 megawatts (MW), with the bulk of the electricity produced from hydropower, but supply is often erratic.

Output fell to 1,900 in March after Lake Kariba and Kafue Gorge plants both recorded low water levels.

Africa’s No.2 copper producer also introduced power cuts in July affecting production in the power-intensive mining sector.

Copper export earnings dropped 29.9 percent in the six months through June, compared with the first half of 2014, the ministry said.

There are also continued concerns over slowed growth in China, a major export destination for Zambia’s copper.

The government says that plans are underway to improve power supply but in the meantime, everyone will have to play a part in sharing the burden as state power utility Zesco Ltd works on modernising facilities.

“We are headed towards the right direction because we are upgrading all these sub-stations. Most of these sub-stations have seen better days, they have been existing for over 40 years and this is the reason why we have said it is now time to increase the tariffs. Of course have applied to ERB (Energy Regulation Board) suggesting that we want 26 percent [increments]. The reason why we want that money is to put up a total overhaul of all these facilities,” said ZESCO spokesperson, Henry Kapata.

On the streets of Lusaka residents say every aspect of daily life has been affected and are calling on the government to find a solution fast.

“The performance of pupils has really gone down because you find that when you give them homework, when they go home and come back the following day, they would give excuses that they did not do it because they had no power at home,” said Agnes Bwali, a teacher.

“Not every church is able to afford a generator set, and those few churches who have gen-sets, probably the issue of diesel is part of it… so it is really affecting the church in terms of, in the midst of the service, maybe power will cut,” added David Mfula, a Cleric.

A scorching drought has hit crop harvests across southern Africa, hitting economic growth and threatening to push food prices and inflation higher. Electricity supply in Zambia is expected to remain tight in the meantime.