Environment News Service ENS Latest Environmental Information Education Current Issues RSS

Environment News Service ENS Latest Environmental Information Education Current Issues RSS


Environment News Service for the latest environmental news, current issues, climate, water, food, forests, species, energy, education. RSS feed.

Home | About | News Index | Services | My Account | Events | Search February 22, 2006


--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

ENS News
for Your Company
Send Your
News to
the World

Advertise
on ENS!

Search ENS!


--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

Turning Out the Lights in Zimbabwe

By Gideon Chawawa

HARARE, Zimbabwe, February 22, 2006 (ENS) - These days, the Makoni family can only afford bacon on Saturdays, soon after payday. It has become a symbolic reminder of years past, when Zimbabwe used to run smoothly and they used to breakfast on the typically English bacon, eggs and baked beans.

The Makonis are a middle-class family of five living in a middle-class suburb of Harare, the Zimbabwean capital. The family misses the short car trip they used to make to the supermarket to buy breakfast goodies. Because of the ongoing fuel crisis, they now send their eldest son Tatenda down to the shops to pick up the bacon and baked beans and thus save what little petrol they have for more pressing purposes.

When Mrs. Makoni opens the packet of bacon she realizes it smells bad. Mr. Makoni takes the bacon back to the supermarket, only to find a long queue of disgruntled shoppers bringing back rotten merchandise. Some have sachets of milk gone sour while others have steaks that have turned green.

“It’s the power cuts,” explained the demoralized shop manager. “We have been having intermittent power cuts for 36 hours.”


Harare neighborhoods like this can be cut off from electricity for days at a time. (Photo credit unknown)
Welcome to Zimbabwe in 2006, where such blackouts are daily occurrences and power cuts can last more than two days. It is now quite usual to see smoke rising from gardens and chimneys as people cook food and boil water on open fires.
When the power does come back, there is no guarantee it will stay on, and so there is frantic rush to cook the next meal, do the ironing, work on the computer and charge cellphones and batteries.

In factories, machines stop operating and pumps go quiet.

Assuming you can find them, a packet of six locally-made candles now sell for more than a quarter million Zimbabwean dollars, about US$2.50.

Officials at the government power utility Zimbabwe Electricity Supply Authority, ZESA, blame the power cuts on Gideon Gono, the powerful governor of the Reserve Bank of Zimbabwe.

ZESA Executive Chairman Sydney Gata told the government-owned daily "The Herald" that the government’s 2003 decision to reverse tariff increases it had already sanctioned was at the heart of the power crisis.

“A government-approved tariff adjustment was implemented in January, February and March 2003 but then reversed by the minister of energy at the request of the Reserve Bank of Zimbabwe, which sought to meet its own inflation targets,” said Gata.

This, Gata said, led to ZESA suffering a 45 percent loss in revenues.


Street in Harare, the capital of Zimbabwe (Photo credit unknown)
ZESA currently produces a kilowatt-hour of electricity at a cost of 1,386 Zimbabwean dollars but because of the low tariffs, sells it for just 218 dollars. As a result of the discrepancy, last year it suffered operational losses of eight trillion Zimbabwean dollars, US$80 million.
“Gono would like the world to believe the loss was due to mismanagement, yet the truth is the buck stops at his doorstep,” said the senior ZESA official. “Because of the loss, ZESA no longer has the money to import power from neighboring countries.”

ZESA generates about 60 percent of the country’s energy needs when all power stations are working at full throttle. At the moment, though, several units at the flagship Hwange plant near Victoria Falls are closed because of a shortage of coal and spare parts. Hwange normally supplies 15 percent of Zimbabwe’s electricity.

Small coal-fired power stations in the country’s two main cities, Harare and Bulawayo, have been shut down altogether. When transformer stations break down, they cannot be repaired because there are no spares.

The country imports about 40 percent of its normal total power consumption from South Africa, Mozambique and the Democratic Republic of Congo. In recent weeks, all three suppliers have cut off the power intermittently because of ZESA’s failure to pay bills.

Importing electricity costs ZESA huge amounts of money - nearly US$12 million a month, assuming it has the cash. As Gata told "The Herald," the company’s total revenue is currently equivalent to only a third of its import costs.

ZESA argues that if it could make its customers pay economically viable rates, it would earn enough Zimbabwean dollars both to buy the foreign exchange needed to pay for imported supplies, and to purchase the parts to repair broken-down equipment in power plants and transformer stations.

But the central bank chairman will not allow a price increase. “ZESA is charging sub-economic tariffs, thanks to Gono,” said a senior finance official at Electricity House, ZESA’s headquarters in Harare.


Gideon Gono is governor of the Reserve Bank of Zimbabwe. (Photo courtesy Sokwanele)
The official said Gono is blocking tariff reviews because rising electricity prices would drive up the already massive rate of inflation, which in January reached 613 percent over January 2005.
What angers the general public is that the power cuts are not planned. In the past, ZESA used the national newspapers to announce the schedule for when different areas would be without power. But now it has stopped making predictions, so people have no way of making provision.

According to Gata, this is because the company is itself unable to do forward planning. “These power cuts are not part of planned load shedding by ZESA. With planned load shedding, we always advised our valued customers of the days, dates and times when it was in operation,” he said. “The [new-style] power cuts are due to factors far beyond the power utility’s control.”

The blackouts plunge many parts of the country into darkness at unpredictable times. Industry is the worst-hit sector, because some plants have no standby generators. Domestic users find themselves unable to cook, while perishables rot in their fridges.


Harare street scene (Photo credit unknown)
Precious Shumba, spokesman for the Combined Harare Residents Association, said it is scandalous that the public is left to guess when the power might be cut next. “ZESA is taking residents for granted,” he said. “Electricity just goes out at any time of day. It makes it difficult for people to plan their daily schedules.”
There seems to be no end in sight. The long-term solution for Zimbabwe would be to build more power stations while ensuring that existing ones have the resources to keep running. Zimbabwe’s power industry is mulling a 20 year development plan worth more than US$3.5 billion that would see the Hwange coal-fired plant upgraded with two more units, the Kariba hydroelectric station expanded, and a new methane powered unit built in Matabeleland.

But as the weekly "Zimbabwe Independent" commented, “All there is to the plan is a document which will be discussed for many years without anything actually being done, as demand for power continues to outstrip supply.

“Zimbabwe will soon not be able to import any power because exporters are anticipating increased domestic demand in their respective countries. Zimbabwe needs help.”

So the expansion strategy is a pipe dream, while central bank governor Gono refuses to allow the power utility to increase tariffs in the interim. For the Makonis, a return to their old breakfast habits seems a long way off.

{Published in cooperation with the Institute for War and Peace Reporting. Gideon Chawawa is the pseudonym used by a Zimbabwean journalist.}

allAfrica.com: Meltdown Looms Large Amid Fear Inflation Will Hit 1000%

allAfrica.com: Meltdown Looms Large Amid Fear Inflation Will Hit 1000%
Meltdown Looms Large in Zimbabwe Amid Fear Inflation Will Hit 1000%

Business Day (Johannesburg)
NEWS
February 14, 2006
Posted to the web February 14, 2006

By Dumisani Muleya
Johannesburg

ZIMBABWE's rampant year-on-year inflation for last month surged to 613,2%, gaining 27,4 percentage points on the December rate of 585,8%, raising fears it is marching towards the 1000% mark.

The Central Statistics Office said yesterday that inflation accelerated due to rising costs of food, housing, education, water, electricity, gas and fuel.

Central bank governor Gideon Gono said recently the inflation rate would rise to 700%-800%, breaching the 622,8% record of 2004, before decelerating.

Analysts have warned that, barring a major policy shift, inflation could hit 1000% by the end the second quarter.

Analysts said that, given the controlled prices of goods and services and parallel market activities, inflation could already be at 800%.

The critical factor in driving inflation has been growing money supply through massive printing of paper money to finance government expenditure and prop up collapsing economic activities.

Broad money supply growth has been on an upward trend, from 177,6% in January last year to 411,5% in December.

Since 2003, the central bank has dished out a record Z$46- trillion in an attempt to arrest economic decline. But the money has largely ended up in consumption activities.

Further inflationary pressures have been fuelled by wage and salary adjustments, price increases and black market activities.

Following the revision of value added tax from 15% to 17,5% and introduction of a number of new tax measures in September last year, the prices of goods and services have escalated.

The yawning budget deficit of 8,6% is also a severe problem.

Government has been struggling to reduce its huge fiscal deficit largely caused by government's rising wage bill from 15,5% in 2004 to 20% of gross domestic product last year.

Zimbabwe's economy shrank 3,5% last year after a 4% decline in 2004 and a 10,5% fall in 2003.

New banknote for Zimbabwe

[ This article is from Sunday Times, South Africa. ]

New banknote for Zimbabwe
Wednesday February 01, 2006 14:48 - (SA)


HARARE - Zimbabwe's central bank has introduced a new 50,000-dollar banknote equivalent after it conceded that runaway inflation would soon shoot up to a record 800%.

The new purple denomination with a picture o the world-famous Victoria Falls, worth around 50 US cents or 40 euro cents, is the latest addition to a series introduced three years ago with a set validity period to ease critical cash shortages across the country.

"We have begun to use the new bearer cheque from today," Reserve Bank spokesman Kumbirai Nhongo said.

"It's not a new currency as such but a higher currency in the bearer cheque range which we are introducing as a temporary measure as we prepare to introduce a new currency later this year."

Zimbabwe is in the throes of economic crisis characterised by three-digit inflation, soaring poverty levels, an unemployment rate hovering at over 70% and chronic shortages of fuel and basic goods like cornmeal.

Central bank governor Gideon Gono has warned that annualised inflation could peak at 800% in March and later recede to below 500% in June before reaching double-digits in 2007, if there are bountiful rains leading to a good harvest.

At the country's independence from British colonial rule in 1980, when the local dollar was roughly at parity with the pound sterling, Zimbabweans used cents, one dollar coins and bank notes in four denominations.

However, due to inflation, the Zimbabwe government introduced four new denominations from 2001 while coins were phased out as the value of the Zimdollar continued to depreciate against major currencies.

Between May and September 2003 the country experienced critical cash shortages which prompted the reserve bank to issue three new denominations - called bearer cheques - the highest of which was for 20,000 Zimbabwean dollars.

The new 50,000-dollar banknote is valid until December.

Sapa-AFP