Lipenga says water, electricity tariff hikes justified

Malawi Government has backed the current water and electricity tariff hike saying it is the only way that will allow Electricity Supply Corporation of Malawi (ESCOM) and Water Boards to maintain machinery used in their service delivery.

Speaking during a speech Friday in Parliament, Minister of Finance, Dr. Ken Lipenga said the aim of the tariff hike was also to reflect the changes in the production costs as government has now stopped subsidising utilities.

“These measures are meant to ensure that there is improved service delivery by ESCOM and the Water Boards. Let me also emphasise that government has moved away from subsidies in the utilities sector,” said Lipenga.

Lipenga: Backs increases of electricity, water tarrifs
Lipenga: Backs increases of electricity, water tarrifs

The Minister said the role of government is to now regulate the sector and to invest in proactive capacity.

He said: “In addition, it is common knowledge that energy subsidies tend to benefit rich people more then they benefit the poor.”

He further said energy subsidies only increase levels of government debt which may cripple the economy if it becomes excessive, thereby increasing poverty rates.

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