Power Tariff Hikes Hurt Africa

Steep power price increases will drive up inflation in sub-Saharan Africa as utilities try to boost electricity generation, weighing on growth on the continent.

This is according to the World Bank's International Finance Corporation.

In South Africa, Eskom is under pressure to increase generation after a crippling power shortage in January 2008 forced it to introduce rationing, plans to spend R1.3 trillion by 2025 to double generating capacity.

The government has allocated billions of rand to help Eskom expand capacity, but the utility has had to pass on some of the cost to consumers; through a 27.5 percent tariff rise last year and a 31.3 percent increment this year.

In Zimbabwe, the government allowed state power firm, Zesa, to adjust its pricing model higher to improve viability, but local industries struggling to get back on their feet after a decade-long economic meltdown say their survival is threatened.

As the country struggles through a crisis that crippled infrastructure and drove unemployment to over 90 percent, many Zimbabweans can only afford paraffin-lit stoves and candles for lighting.

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