AfDB commends Govt for subsidising cost of fuel

22 Feb, 2020 - 00:02 0 Views
AfDB commends Govt for subsidising cost of fuel

The Chronicle

Leonard Ncube, Victoria Falls Reporter

THE African Development Bank (AfDB) has commended Government for subsidising the cost of fuel taking into consideration the prevailing economic challenges.

The country continues to experience fuel shortages due to limited foreign currency resources, resulting in Government subsidising the sector by availing foreign currency to dealers.

Speaking at the Regional Energy Regulatory Association of Southern Africa (Rera) conference here on Thursday, AfDB chief energy sector regulations specialist, Ms Rhoda Limbani Mshana, said the Government fuel subsidy was a positive stance in cushioning citizens.

“There is a need for more effort in terms of assessing service of each utility and level of monitoring and compliance. For Zimbabwe, the economic situation and cost of fuel is very high hence Government decided to take up the cost so that it doesn’t translate to high tariffs. Government has done well in terms of fuel supplies and management of prices. This is work in progress,” she said.

Ms Mshana said while other countries were also subsidising fuel just like Zimbabwe, their survey also identified some gaps such as lack of independence of utilities and regulators from Government and balancing consumer needs.

“In terms of consumers, we approached chambers of commerce and representative groups to take surveys and what we found was that performance was very weak. There is clearly a high level of dissatisfaction among consumers.”

She said the regional bank carried out an electricity regulatory index (ERI) survey on 34 countries last year, where 13 of them including Zimbabwe are in the Sadc region. Only Tanzania and Namibia featured in the top 10 from the Sadc region out of the 34 countries. The ERI helps as a diagnostic tool to identify gaps and also provide some recommendations and Zimbabwe has been part of the performance evaluation since 2018.

Ms Mshana said the ERI focused on three main pillars around regulatory governance, regulatory substance and regulatory outcome and was based on feedback received from regulators and consumers’ point of view. 

Each country’s performance was indexed from low to high performance marked using red, green orange and yellow colour codes respectively.  “In 2019 there were 34 participating countries, 13 of them from the Sadc region. There was strong representation from the region and within the 13 representatives most performed from average to substantially high in terms of level of development.

“In terms of the key findings, there were some critical areas across each of the pillars. The majority of the countries are in orange and yellow, which means they had an average to high level of development,” Ms Mshana said.

She said while there has been significant progress, countries can still do better. The regional bank has since called for more consumer consultation, open information and easier access to documents. 

Zimbabwe Energy Regulatory Authority (Zera) acting chief executive officer, Mr Eddington Mazambani, said it was not easy to consult every consumer hence consultations were done through their representatives in various organisations and groups.

The conference started on Monday and ended yesterday under the theme: “Creating a conducive environment to enhance regional energy security, trade and investment.” @ncubeleon

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