CAMA against World Bank’s demand for an increase on Malawi’s electricity tariffs

Consumers Association of Malawi (CAMA) strongly condemns World Bank’s demand for an increase on the country’s electricity tariffs.

In a public statement issued on Friday, November 29 by CAMA’s Executive Director, John Kapito, reminds the Word Bank that matters related to electricity tariff increase are handled through Malawi Energy Regulatory Authority (MERA) as according to consultative meetings with all key stakeholders before a tariff is approved.

CAMA says in deciding to increase electricity tariff, MERA “takes into account key economic and social fundamentals when conducting and reviewing tariff increases”.

“While advice is accepted from all stakeholders, including the World Bank, it is important for such advice to come through appropriate channels and platforms,” continues the statement.

“We would have appreciated the advice from the Word Bank if it was done through the Ministry of Energy and the Malawi Energy Regulatory Authority in camera other than creating speculation and confusion on prices of goods which might be triggered by an anticipated electricity tariff increase.

“The methodology for electricity tariff increase is done through a transparent legal framework using the Energy Regulatory policies and Act guided by MERA.”

CAMA contends that “through the use of such guidelines MERA is able to determine a tariff that is economically and socially good for ESCOM and Consumers”.

“There are a number of considerations that MERA puts in place and key among them is to ensure that ESCOM operations are sustainable and also the consideration of environmental issues and ensuring that supply of electricity to Malawian consumers is affordable and this is based on a cost recovery tariff.

“The World Bank, unfortunately, is only using one single consideration which is opening up the market for other electricity generators and distributors to enter the Malawi market without taking into account how a higher tariff would hurt Malawian consumers.”

CAMA further attacks the World Bank that its “credibility throughout the world and especially to poor countries like Malawi has been pathetic where most of the policies and advice have ended up creating poverty amongst citizens”.

“Malawi is different from the developed countries where tariffs of a strategic product like electricity cannot be left to market forces and we don’t expect the World Bank has the integrity to educate Malawians regarding general prices of goods and services on the market.

“We would wish to appeal to the World Bank to stop engaging and confusing Malawians in the name of providing advice and wish if they conducted their various activities in providing advice to our leaders in camera — other than wishing to humiliate Malawians by conducting public press conferences that may trigger unnecessary anger and misunderstandings,” contends CAMA.

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