Zambia is currently going through a tough time following a severe drought. The Zambian government declared this drought a national disaster in late February 2024. The drought is attributed to a combination of factors, including below-average rainfall, El Niño's influence on weather patterns, and possibly climate change.
The lack of rain has devastated Zambia's agricultural sector, with nearly half (around 1 million hectares) of the planted maize crop being destroyed. This threatens food security for over a million households. More importantly, the lack of rain is hurting the country's ability to generate hydropower, which is their main source of electricity.
Indeed, reduced water levels at Kariba Dam, the country's major source of hydropower, are significantly affecting electricity generation. Zambia is expecting a shortfall of electricity, ranging from 430 megawatts to potentially 520 megawatts by December 2024.
To address the problem, the Zambian government plans to import electricity from neighboring countries to bridge the gap. And to manage the limited power supply, electricity rationing is expected to be implemented across the country. This means planned outages or limitations on electricity usage for homes and businesses.
The Zambian government believes that importing electricity and rationing it would reduce blackouts, which can help keep businesses running, maintain essential services like hospitals, and minimize disruption to daily life. Moreover, the government claims that a stable electricity supply can prevent a slowdown in economic activity, particularly in sectors reliant on electricity. Businesses can continue production and avoid losses due to power outages.
While all these initiatives present short-term solutions, these solutions, however, do not address the long-term conundrum of importing electricity. The first major problem with importing electricity is that Zambia will become dependent. Indeed, Zambia becomes dependent on the exporting countries' ability to generate and transmit electricity. Disruptions in their grids or political instability could impact Zambia's supply.
Furthermore, the price of imported electricity can be volatile, and influenced by global energy markets. Zambia could face higher costs if demand for electricity surges in neighboring countries. Thus, as an importer, Zambia might have less bargaining power when negotiating prices with electricity suppliers.
Beyond the dependency that it will create, importing electricity will have severe economic repercussions for the Zambian people. Paying for imported electricity can put a strain on Zambia's foreign currency reserves. This could limit their ability to import other essential goods. The increased cost of electricity can lead to higher prices for goods and services produced in Zambia, impacting inflation.
Reliance on imports might delay investments in developing domestic energy sources like solar, wind, or improved hydropower infrastructure. These long-term solutions can make Zambia more self-sufficient and less vulnerable to future droughts.
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