Power Outages Affect Zimbabwe’s Manufacturing Sector

Power Outages Affect Zimbabwe’s Manufacturing Sector

From Business Day Live

Zimbabwean industrialists and manufacturing groups have warned that ongoing power outages — which are set to worsen in the next five months — will further dent the country’s industry and manufacturing sectors, whose productive capacity has declined to 39% says a Confederation of Zimbabwe Industries survey.

Zimbabwean industry, manufacturing and mining companies have had to turn to high-voltage diesel generators to sustain production during lengthy periods of power outages. This has badly affected the sectors’ productive capacity.

“We wish to advise the public that we will be carrying out planned outages for maintenance at the power stations with effect from the 2nd of September 2013 to the 2nd of February 2014,” Zimbabwe Power Company said in a recent statement.

Analysts told Business Day on Wednesday that increased power cuts would hurt the economy because of scaled-back production while companies’ second-half earnings this year would be lower.

“Reduced productivity affects economic growth, which has already been revised downwards. We may also see this having an impact on income trends for companies during the second quarter as most of the revenue will go towards generators as an alternative source of power,” independent economist Moses Moyo said on Wednesday.

Zimbabwe Power Company said it would carry out scheduled maintenance at two power stations: Kariba and Hwange, hence the increase in power cuts.

The two power stations have capacity to generate 750MW and 700MW respectively. However, data show that Kariba currently has an average production of 500MW while Hwange is producing 380MW.

Zimbabwe has a peak demand for electricity of about 2,200MW, and has had to rely on power imports of up to 300MW. Most is imported from neighbouring Mozambique.

“Production time is lost when there is no power, because unlike the bigger companies that can sustain longer periods using generators, we are already hard-pressed for cash.

Read more at Business Day Live.