Tanzania: Affordable, Reliable Power Key for Revitalization of Industry

Posted on :Wednesday , 4th January 2017

Reliable supply and affordable electricity is the key in the establishment and revival of industries in the country. Since it came to power, the Fifth Phase Government has been encouraging both local and foreign investors to set up industries in the country.

Last week, the Energy and Water Utilities Regulatory Authority (EWURA) announced the increase of electricity tariff by an average of 8.5 per cent.

It is quite clear that the news were bitter to both small entrepreneurs and big investors.

The increase of electricity tariff means increase of production costs, which also lead to the increase of prices to various products. With the ongoing campaign by government that aims at building an industrial-driven economy and boost country's economy, the increase of power tariff sounds like a set back to the government's efforts.

As the government continues with its plan to electrify rural areas under Rural Energy Agency (REA) programme, it would be meaningful if the connected power is affordable to ordinary Tanzanians in various areas, including those who live in rural areas. Reliable and affordable electricity must directly benefit the development of rural areas.

The decision taken by the Minister for Energy and Minerals, Professor Sospeter Muhongo, to revoke the decision by EWURA to introduce the new tariffs, set to start last Sunday, was commendable. Prof Muhongo must have considered the suffering of majority Tanzanians and acted immediately.

It is so obvious that when tariffs go up, they discourage the manufacturing sector, which is highly dependent on power, which could deter efforts towards industrialisation.

President John Magufuli expressed his disappointment with EWURA's decision, saying the regulatory body cannot increase tariffs while the government was working hard to ensure that most people, especially in rural areas, get electricity.

President Magufuli and Prof Muhongo's immediate intervention on the matter show clearly how the government is committed to bring true changes to the people.

The government has categorically shown how it serves the interest of majority poor Tanzanians. It is quite clear the implementation of the new tariff would have affected small entrepreneurs who are struggling to set up businesses and improve their capital.

The new tariff also would have affected big investors by increasing industrial production costs.

Prof Muhongo's move towards EWURA's decision has set a precedent for other institutions to always consider public interests before reaching to the consensus.

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