Finance and Economic Development Minister Professor Mthuli Ncube has warned power utility ZESA Holdings against hiking tariffs, saying it would add to inflation and hit customers already angered by the current load-shedding.
Speaking at a parliamentary hearing in Harare today, Professor Ncube told the Parliamentary Portfolio Committee on Budget and Finance that although electricity was still cheaper compared to regional peers, any further tariff increase would hit consumers hard.
“Any ill-advised sharp increase in ZESA tariff rates combined with power outages that we are already facing will be most unwelcome, and will certainly trigger another round of price increases and inflation,” he said.
Professor Ncube added that inflation in the country has been mainly driven by speculative behaviour particularly if one commodity increases prices, the entire market reacts.
Meanwhile, the Permanent Secretary for Ministry of Finance and Economic Development Mr George Guvamatanga accused exporters of keeping $900 million of their earnings in offshore banks, money that he said should be repatriated to ease the dollar shortages and help stabilise the exchange rate.
At the same parliamentary hearing, Mr Guvamatanga said that $500 million out of last year’s $4.3 billion export earnings was still being kept offshore.
He said another $400 million was outstanding from January to May 2019 exports, which earned $1.4 billion, adding that exporters were also keeping $800 million in local foreign currency accounts.
“There is $1.7 billion that should be available in this economy to pay for the pharmaceuticals, to pay for fuel and all the requirements we need as an economy,” Mr Guvamatanga said.
The Treasury official noted that the government “does not have the intention whatsoever to grab exporters” dollars.
Exporters have 90 days to repatriate earnings to the country, but some of them take longer.
Most of the exporters are, however, reluctant to sell their money on the official market citing delays in getting dollars again on the local interbank market when they want to pay for imports.