Power scarcity caused by sustained drought has some Tanzanians feeling the pinch of increased consumer goods prices and sparked concern that Tanzania may not meet its World Vision 2025 development goals.
A teenager pulls a cart loaded with goods in front of the main entrance of Kariakoo Market in Dar es Salaam, where prices have skyrocketed due to electricity rates hikes. [Deodatus Balile/Sabahi]
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World Vision 2025 is Tanzania's blueprint to develop the country into a middle-income economy.
Opposition leader Wilbrod Slaa, secretary general for the Chama cha Demokrasia na Maendeleo (CHADEMA) political party, said the acute shortage of electricity has disturbed the production cycle and increased the cost of living, presenting serious challenges for the future.
"Just a month after the power tariff increase, nothing has been spared. A loaf of bread has gone up, water utility companies are seeking increases from the regulator, sugar, rice, maize flour … you name it yourself. The country is in a total mess. By all parameters, it is evident Tanzania cannot realise its goals laid down in Vision 2025," he told Sabahi on Monday (February 27th).
In January, the state-owned Tanzania Electric Supply Company (TANESCO) increased the price of electricity from 195 Tanzanian shillings (about $.07) to 273 shillings (about $.12) per kilowatt-hour (kWh), triggering prices of commodities to also go up.
Innocent Rweyemamu, a TANESCO employee and resident of Dar es Salaam, said life has become harder since the country faced unprecedented power rationing in 2006, leaving production institutions paralysed and forcing the country to generate electricity using jet A-1 fuel.
Rweyemamu told Sabahi that producing electricity by using jet fuel is extremely expensive compared with hydroelectric power, the country's traditional source of energy.
TANESCO Director General William Mhando told Sabahi that before 2006, the company produced 80% of its power using the hydroelectric power plants. Since then, he said Tanzania has faced a unique drought caused by a shortage of rainfall, forcing citizens to rely on the more expensive jet fuel. "The cost of producing one unit [kWh] has gone up to around $.24, but the regulatory authority does not allow us to sell the same unit above $.119," he said.
Last month, TANESCO's 150% proposed increase in fees was denied by the Energy and Water Utilities Authority (EWURA), which capped any increase at 40.29%.
"This is rather frustrating," Mhando said. "We are spending about 60% of the company's revenue to service the capacity charge by private operators."
But EWURA Public Relations Manager Titus Kaguo told Sabahi the agency capped increases to power tariffs because it was determined that TANESCO could improve efficiency and reduce operational costs, thus improving revenue margins. "For example, TANESCO has a 25% leakage of electricity. If they can cut down the leakage to 10%, they can be comfortable," Kaguo said.
Scarce electricity increases cost of living
Said Mohamed, a trader who owns a kiosk along Samora Avenue in Dar es Salaam, said increasing wholesale prices are being passed on to consumers. For example, the cost of one litre of mineral water has gone up from 500 shillings to 800 shillings.
Salim Nuru, a trader in Dar es Salaam's Kariakoo market, said prices for staples like rice have gone up from around 1,800 shillings to 2,500 shillings per kilogramme. Customers have been complaining that life is becoming harder for them to afford, he said.
"The cost of living has gone up, but my salary is still the same," said Anastazia Simon, an employee at the Dar es Salaam city council. "I am earning 100,000 Tanzanian shillings per month, but by increasing the cost of electricity, everything has gone up. Manufacturers claim that they spend more, therefore they have to recover their cost, and this only means increasing the prices, so the loser is the last consumer. I am not sure I can afford it anymore."
"Normally we used to eat ugali [stiff porridge] during the day and rice at night, but now we have rescheduled to take ugali day and night except at the weekends," she told Sabahi. "My young boy, Nelson, took note of this and just yesterday asked me why we are eating ugali at night instead of rice. I told him to be patient and hope that the situation will stabilise in the future."
Manyerere Jackton, who owns a business in Dar es Salaam city centre, said the blackouts are countless. At every internet café, hotel, office and wherever one is doing business, the solution is to buy a generator. "We are told the power rationing that lasted for almost two years is over, but we cannot note the difference. The power is always out," Manyerere said.
TANESCO Deputy Managing Director of Distribution and Customer Services Felchesmi Mramba told Sabahi on Wednesday that power cuts over the weekend were not related to power rationing.
"We announced in the newspapers that our counterparts from Japan would be servicing the Ilala substation. This is a central hub of our power supply in Dar es Salaam city, so once switched off, most parts of the city are affected," he said. "Yes, we have power shortages but not to the level of rationing like it was last year."
Improvements in the works
Minister for Energy and Minerals William Ngeleja said the problem of increasing prices is temporary.
"We are looking for lasting solutions," he said. "In December, we secured a $1-billion soft loan from China that will be used to construct a natural gas pipeline from Mtwara to Dar es Salaam. We are also going to produce electricity by using coal at Ngaka and Kiwira, so many good plans [are] in place that will reduce production cost for electricity per unit [kWh]," Ngeleja said. "All of these will make life much easier."
He said the country is producing 1,000 megawatts, and he was optimistic that with a realistic plan in place the country could increase production to 3,000 megawatts by 2015, achieving Tanzania's Vision 2025 development goals.
"This will spark the growth of industries that will result in prices of goods going down," he said.