Statement from BE Board: We’re Fully Behind the Recent Statements by our CEO, E. Nathi Dlamini
Business Eswatini’s mandate is to promote the advancement of our national goals and aspirations while advocating for and protecting the interests of the business community, in particular those businesses under Business Eswatini. In this spirit the board of BE stands fully behind the statement issued by the CEO. The Board of BE is disappointed at the politicisation of the CEO’s statements despite the full knowledge that it came from an informed place.
For too long now, Eswatini’s utility tariffs have not been cost-reflective. The cross-subsidisation of electricity, in particular, has forced many businesses to look into off-grid solutions to lower costs.
It is no secret that with the load-shedding and power shortages in the Republic of South Africa there is going to be an increase in the price of electricity over the medium term, while the proposed thermal power plant is 8-10 years in the offing, there is a looming potential shortage being forecasted over the medium term.
BE membership includes all the biggest users of electricity in the country, most of which are looking at alternative renewable energy self-generation projects due to the high costs of electricity and the unfavourable outlook. If such a situation were to occur, as it seems it will, and a number of large private sector organisations were to go off-grid, the cost of maintaining the grid, which would remain unchanged, would be passed on to the consumer entirely, resulting in sharp increases in electricity tariffs for all. We need to avoid a situation where all businesses go off grid, and there is no one left to subsidize domestic consumers.
The Global Competitiveness Report 2019 ranks Eswatini at 121 out of 141 economies, improving vital metrics of competitiveness such as the cost and quality of utilities is a crucial step towards improving these rankings and attracting Foreign Direct Investment.
Holding down natural increases in utility bills is a flawed way to enhance consumer welfare. Nothing will benefit the average Liswati more than the creation of jobs. A thriving private sector is crucial for the creation of sustainable sources of employment for Emaswati. Business Eswatini is committed to working with our members to further this agenda. Moreover, utility price hikes for the private sector are inevitably passed on to the consumer, in the form of higher prices of goods and services, eventually harming the end user.
The original proposal from EEC was an increase of 10% for the consumer and between 6.8% and 7.22% for the various categories of private sector users. After lengthy consultations with BE and the ESERA, the proposed increase was brought down to 3% for consumers and a decrease of 1.27% and 1.33% across the private sector categories. BE strongly felt that this would balance the pressure on the consumer and go a long way towards achieving our national objectives of enhanced investment and job creation, while reflecting a huge reduction from the initial proposal.
Andrew le Roux