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Zanzibar investors decry costly, unreliable power supply

Zanzibar investors decry costly, unreliable power supply

In a private-public sector dialogue led by Zanzibar National Chamber of Commerce, Industry and Agriculture (ZNCCIA), it emerged that high cost of power and unreliable supply were major impediments to improved business environment. According to both ZNCCIA Vice President, Mr Ali Aboud and the Executive Director, Ms Munira Hamoud, high cost of power does not only hurt the average consumers but may also force industries out of the isles.

They noted that the surge in electricity charges could further push inflation in Zanzibar and raise the cost of doing business. Dr Mohammed Hafidh Khalfan, a renowned economist, said, “Electricity cost is the leading obstacle in Zanzibar enterprise development, operation and growth.

Without finding a lasting solution to this obstacle, Zanzibar's dream of having a middle class economy by 2020 will be difficult to attain, with the situation likely to deteriorate further.” He has the opinion that Zanzibar is capable of attracting high potential investments but the costs of production due to power issues among others, defeat the aspirations embedded in the Zanzibar Investment Policy.

“The impact of high electricity prices can be correctly guessed; high tariff increases operation costs, reduces production and profits,” he said. The Zanzibar Electricity Company (ZECO), effective June 1, 2012, increased power tariffs as follows: lifeline tariff (including domestic users) to 161/- from 120/-, small industries (172/- from 140/-), large industries (169/- from 142/-), and street light tariff (141/- from 105/-).

All customer service charges increased from 1,500/- to 2,000/-. ZNCCIA holds that in the current settings the set increment is unproductive as will eventually disrupt production capacity, lead to wastage and underutilization of resources, culminating into leaking much needed foreign currency as imports grows.

125 billion cubic feet  natural gas produced at Mnazi Bay

MORE than 125 billion cubic feet of natural gas ...

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Author: DAILY NEWS Reporter in Zanzibar

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