Kapito supports Malawi electricity tariff hike of 37%

Consumers Association of Malawi (Cama) has supported the move by Malawi Energy Regulatory Authority (Mera) to allow Electricity Supply Corporation of Malawi (Escom) hike its tariffs by 37.28 percent.

Mera announced on Monday that the increment will be done in a period of four years in a phased manner with the first adjustment of 13.5 percent starting from Friday (April 4, 2014) last week.

Cama Executive Director, John Kapito told Nyasa Times in an exclusive interview that although the increment might be painful on consumers but is acceptable and will act as a catalyst of growth for the energy sector.

Kapito:  It's realistic

Kapito: It’s realistic

“Indeed its painful when costs go up especially on basics like electricity but we must remember that our resistance was not against Escom not raising their tariffs but we were against the proposed 58 % increase and I must indicate that the approved 37.28% and spread within four years is acceptable based on the arguments from both sides given during the public hearings the Mera conducted,” Kapito said.

He said the hike confirms that Mera took Cama’s argument against the 58 percent proposed increment seriously, and that spreading of the approved tariffs over four years with immediate increase at 13.5 percent for the first year is acceptable.

“As indicated earlier the arguments on the proposed tariff were not against tariff increases but we were fighting for a tariff that consumers could afford given that the proposed was 58% as you might appreciate the economy has seen massive increases in most goods and services and key among them is the exchange rates that have gone up by over 200% and they are key in the determination of power generation.

“And we also noted water tariffs and prices of basics like Sugar ,transport ,and other basics going up with high margins, therefore we were lucky as consumers to be given an opportunity to argue against the proposed 58% electricity where it has only gone up by 13.5%,” Kapito added.

The Cama boss however, said as consumer rights defender, he would have loved to see the country’s population been given adjustment spaces on other products like exchange rates, water, transport and food items whose prices have gone up by over 109 percent in the very same year as electricity tariffs.

Kapito then brushed off suggestions that the electricity tariff hikes will have implications on consumers whose majority are on low income level, revealing that consumers have been given right service worthy their money as the tariff increment comes with Key Performance Indicators (KIPs) where consumers must monitor Escom performance and hold it accountable in the first year.

“Any price adjustments have negative implications in countries like Malawi where levels of incomes are very low are rarely adjusted and considering that its 9% of the Malawian population that have access to consumers, but on another note we also need to have consistent power supply in Malawi and sometimes paying realistic prices would sustain that but it can also be a catalyst for some firms to invest in Malawi and create employment to consumers,” he said.

Cama has since advised consumers to be economic in their electricity consumption by using it sparingly, ensure they are using energy saver bulbs, rooms not in use electricity is switched off and boil only water that you would want to use.

Mera Chairperson, Lyton Zinyemba said in a statement that the average electricity tariff will change from the current average of K31.54 per KWh to K43.24 per KWh over the four year period.

The increment starts with 13.5 percent in the first year with increase of 18.18 percent to be done in the second year, 8.9 percent to be effected in the third year and 1.9 percent in the final year.

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