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Sunday, 29 July 2007

Victims of success....Zambia's rising energy demands

Zambia, where power to customers like Mwale is rationed almost every day, is a template for such problems. Barely 20 percent of households are wired for power - only 3 percent in rural areas - but the Zambia Electricity Supply Co., known as Zesco, is signing up 10,000 new customers a year, said Christopher Nthala, the utility's transmission director.

Now Zambia is getting a push: A global commodities boom has jolted its moribund metals industry to life. Investors are building two smelters, and doubling the capacity of another, to handle the boom in copper, nickel and other metals, taxing the nation's power supply."We've never seen this kind of growth before," Nthala said. Once the utility could make up shortfalls by buying power from other utilities in the Southern Africa Power Pool. But now, Nthala said, neighbors have little surplus to hand out. "Sometimes we get it," he said. "Sometimes we don't."

None of that mollifies customers, who say blackouts are so common that service in much of Lusaka has become totally unreliable. Many power failures seem to hit Matero, a poor township that is home to maybe a million of Lusaka's estimated three million residents. "Every day - it's either in the morning, when people are going to work or preparing to cook, or in the evening, the prime time when I'm tired and I need to go home and listen to the news and cook my supper," said Bishop Peter Ndhlovu, who leads the 250,000-member Bible Gospel Church, an evangelical movement.
The above extract is from International Herald Tribune's fascinating article Energy shortage hampers development in Africa. I am sure there's an opportunity here for Zambians at and abroad this time to step in and put some loan funding package together and invest - I sense this could be an investment opportunity that defines the nation in the long term! Are you with me or should we leave it to the Chinese and Equinox?

7 comments:

  1. By the way, on this page I have listed India's FDI policy, which is much more aggressive than Zambia's.

    Interestingly, India allows no FDI in it's atomic energy sector at all. This should apply to Zambia's uranium mines too.

    http://maravi.blogspot.com/2007/07/indias-foreign-investment-policy.html

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  2. why is zesco not investing in another power station to supply the demand that is there? are we waiting until the situation gets out of hand to try and find solutions in desperation.

    india can't be compared to zambia, how many indians arround the world have been investing back home and probaly going back to develop their country.

    we have the best brains but they can't find a solution to their problems and always blaming politicians that are popular among our illiterate masses.

    for zambians to form partnership to invest there has to be protection of their investment not a situation where someone can bankrupt a whole company without being punished for their crimes.

    this is similar to our academicians studying for 7years (with closures) and going on a night out and have intercourse without protection.all the effort is flushed in the toilet.

    the demand for power if not balanced out,the other side will weigh down the progress being made.

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  3. Arthur,

    ”we have the best brains but they can't find a solution to their problems and always blaming politicians that are popular among our illiterate masses”

    You are right that Zambia does have people who can come up with creative solutions but the problem is actually two sided.

    One the one hand politician have tended to politicise everything. So you cannot offer independent advice to them unless you are part of them. We see this with Permanent Secretaries. Directly appointed by the President and without competition. So they toll the party line instead of being independent civil servants.

    On the other hand we have Zambian intellectuals who are actually infatuated with political positioning. Instead of realising that there are other ways to serve your nation, they totally see only one route – political office.

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  4. our intellectuals comeback home and expect that everyone will kneel at their feet with their little knowledge of whats happening on the ground. our intelectuals are of the highest ignorance sometimes i wonder if it'sin our interest to spend money on them.

    they comeback home and expect a twenty first century country,this just shows how ntelligent they are.

    if you are going to go back to africa the first thing you have to know is the stage the people are at,as in what year of which century they are at that moment.

    i hear of nigerians having problems going back home,i told one guy that what makes him think his people are so stupid with how they ahve been living their lives?

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  5. Arthur,

    I don't know what tangent you are on, but I don't like the attitude.

    Please, fewer generalisations and more facts, if you don't mind.

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  6. The government should immediately privatise the electricity industry.They have no business selling power. The country would be much better served if this happened. The existing company should not be protected from market forces. It is the incumbant and in seriously fast growing market should have no trouble getting a partner in funding a nuclear poer station.
    The government could help by finding a suitable location and speeding up the upgrade of the national grid or by giving the grid to someone else to take forward

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  7. Node-Net,

    The government should immediately privatise the electricity industry.They have no business selling power. The country would be much better served if this happened. The existing company should not be protected from market forces. It is the incumbant and in seriously fast growing market should have no trouble getting a partner in funding a nuclear poer station.

    The government could help by finding a suitable location and speeding up the upgrade of the national grid or by giving the grid to someone else to take forward


    There is nothing wrong with having parastatals. What is problematic, is not separating the actual operations/management, and political appointments. Fix that issue, and a lot of problems disappear (and the same for civil service).

    State companies can be great. In fact, I'd rather see state owned companies instead of corporations, and let free competition ensue among small and medium-sized enterprises.

    For an example of a state owned company, see Saudi Arabia's SAUDI ARAMCO. This company started out as a foreign owned corporation, with the state of Saudi Arabia having a 25% stake. They built this out to 100% ownership.

    What is important, is that appointments are made on merit - open competition and exams. What we are seeing now is cousins and nephews of (fill in the blank) ending up in managerial and executive positions. That is the problem.

    In theory, that is not very hard to change. It is matter of procedure. In fact, politicians see their ability to appoint as a form of power. Power they have to not only influence institutions, but to reward supporters for their loyalty. What is needed, is a clear distinction between companies that exist to make the economy work, and everything else. Let politicians appoint and reward their loyalists *within the party*, not in government.

    And about protecting parastatals from market forces.

    What market forces? The massively advantaged foreign corporations, which receive massive subsidies from the Western tax payer? From companies that have had decades of government support under Apartheid (like Shoprite, which seems to be becoming the WalMart of Zambia)?

    If we are going to look to the interaction between government and corporations/parastatals, we should be looking at the Keiretsu and Chaebol of Japan and Korea, respectively.

    I don't think corporations (especially non-Zambian owned corporations) are the way to go. They can pick up and leave any time they choose, there is very little positive impact on the local economy, etc.

    ReplyDelete

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