Power Cuts Cost Zimbabwe 6.1% Of GDP - World Bank

The World Bank has said power cuts cost Zimbabwe a total of 6.1 per cent of gross domestic product (GDP) per year.

In its fourth Zimbabwe Economic Update report released on Wednesday, 13 December, the World Bank said power shortages are hurting the mining sector which consumes a lot of energy. It said:

World Bank estimates suggest that Zimbabwe’s power shortages cost the country a total of 6.1% of GDP [gross domestic product] per year, comprising 2.3% of GDP in generation inefficiencies and excessive network losses, and 3.8% of GDP on the downstream costs of unreliable energy…

Electricity deficits are particularly damaging for the mining sector, given its highly energy-intensive characteristics, so unreliable and expensive electricity supplies reduce the margins of existing operations and weigh heavily on the feasibility evaluations for expansions and new projects.

The World Bank said power cuts were also negatively affecting agricultural and agro-processing sectors by undermining irrigation, as well as cold chain and storage facilities.

It said the tourism sector is also affected as hotels, resorts and tourist attractions face disruption of essential services.

All these effects translate into lower economic growth and lower household incomes, the bank said.

The Washington-based lender said for Zimbabwe to achieve universal electricity access by 2030, large investments are required, especially in solar power and grid expansion.

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