Government control of electricity has left Zimbabwe and South Africa in the dark
IN the 1980s and late-1990s, it was unthinkable that Zimbabwe would experience electrical power outages.
With the country having two of Africa’s largest hydro-electric power stations along the Zambezi River, it seemed Zimbabwe’s capacity use would only be interrupted by an unlikely event.
In the north lies Kariba Dam, commissioned in 1960 by the Federation of Rhodesia and Nyasaland and designed by Coyne et Bellier, with nominal capacity to supply 1 600 megawatts of power.
The liberation war did interfere with the construction but, by 1980, it was set to propel the newly independent Zimbabwe to the heights of industrialisation.
In the east lies Cahora Bassa, commissioned in 1974 shortly before Samora Machel’s Frelimo overran the Portuguese garrisons to set up a communist government in Maputo. This power station played a key role in satisfying the power deficits of Mozambique’s economically hyperactive neighbours.
As time progressed, Zimbabwe expanded its mining, industrial, agricultural and commercial capacity, all of which necessitated enhancing or supplementing Kariba’s power supply.
Attention was focused on thermal units in Hwange, the coal mining hub a few hundred kilometres from Victoria Falls, and similar units in Bulawayo and Harare.
Towards the end of the 20th century, the then president, Robert Mugabe, was getting uncomfortable with the new democratic culture, having enjoyed unprecedented one-party paradise since 1980.
Life’s lessons have taught Africa that no good economics comes from bad politics. Although the state-run Electricity Supply Commission (ESC) had inherited impeccable maintenance systems, Mugabe’s Zimbabwe Electricity Supply Authority (Zesa) was eroded and corroded by nepotism, corruption and executive thuggery.
South Africans today understand what this results in.
Eskom, the almost 100-year-old state-owned power utility has blossomed into more than 40 sub-units, with a current generation capacity of more than 200 000 gigawatts.
On paper, it is difficult to understand why such capacity fails to satisfy South Africa’s power demands.
Just as in “independent” Zimbabwe, the governing ANC in South Africa ignored, if not fuelled, the cronyism that corroded Eskom.
In Zimbabwe, Zanu-PF trumpeted dozens of “mega deals” that were intended to replace ageing generators. Millions of dollars have been paid to Malaysian and Chinese companies as thousands of material contracts are channelled to companies with close ties to the ruling party.
At one time, the Zesa was the best go-to company for electrical engineers but antagonism, greed and an inefficient human capital system sent thousands of world class engineers to New Zealand, Australia, and other destinations.
Electricity subsidies meant to pacify “new farmers” who benefitted from Mugabe’s notorious “fast track land reform programme” in 2000 means the Zesa operates on sub-economic tariffs that make it impossible to recapitalise the ailing power giant.
In an environment that is already suffering from hyperinflation, those few industrial and mining companies brave enough to remain have to bear with crippling load-shedding.
President Emmerson Mnangagwa dreams of turning Zimbabwe’s mining sector into a multi-billion-dollar industry but that is a bridge too far with a power utility operating at 50% capacity.
Ruling party politicians are quick to say that South Africa will step in to quench our power deficits but this is a fallacy. Zimbabwe owes its neighbour millions in unpaid power bills and South Africa also has its own power deficit nightmares.
Only a few weeks ago, South Africa’s president, Cyril Ramaphosa, tried to reassure sceptical South Africans about “alternative power arrangements”.
Power analysts in the region argue that Zimbabwe and South Africa’s state governance model does not allow competitive practices in the sector. For instance, Zimbabwe has, for years, encouraged independent power producers (IPPs) to channel excess power into the national grid.
But this has been frustrated by the central government’s determination of the tariff at which the ZESA should buy, much to the chagrin of IPPs. There are also unresolved structural issues in that the Zesa board is controlled by a ruling party crony who is quick not to just divert tenders to party cronies but also channel millions of United States dollars into Zanu-PF’s political programmes such as “rural electrification” and “command agriculture”.
The billions of local real-time gross settlement bond currency declared as revenue by the Zesa have no capacity to quench the state-controlled company’s thirst of multi-billion-dollar infrastructure needs denominated in foreign currency.
Power analysts say Eskom is not short of infrastructure, but has been disabled by a huge financial black hole traced to state capture culprits, the Guptas.
The company has a woeful maintenance system and failed to extricate itself from “command economics”.
Both countries’ obsession with state-owned enterprises deprives our economies of free market competition.
To place a country’s entire energy production and pricing in the hands of politicians is a catastrophe waiting to happen.
We may be politically independent but the cost is becoming too heavy to bear. I am not saying we should return to colonialism. Instead we should borrow from the past that which made our power corporations models of excellence in Africa.
About the writer: Rejoice Ngwenya is the founder and executive director of the Coalition for Market and Liberal Solutions in Zimbabwe, and a contributing author for the Free Market Foundation.