"The situation is quite serious, looking at the rate the water level is going down," Siatambika, 35, a tour guide at a lodge
in Sinazongwe, on the northern lake shore, said in an interview. "It's likely to be even worse than in 1995."
The southern African nation, the second-biggest copper
producer on the continent, typically generates almost half of
its electricity output from a hydropower plant at Kariba. The
power shortage is deepening an economic crisis as
President Edgar Lungu's government struggles to cope with
a plunge in metal prices, a widening budget deficit and a
collapse in the nation's currency.
Kariba is the world's biggest man-made reservoir by volume
that straddles the Zambian and Zimbabwean border and
supplies about 1,830 megawatts of power to the two nations
when running at full capacity. The dam was 40 percent full
on July 19, less than half what it was a year ago, according
to official data. Fed by the Zambezi river, the reservoir is
226 kilometers (140 miles) long and as wide as 40
kilometers.
Zambia's state-owned utility Zesco Ltd. has asked mining
companies including Glencore Plc and Vedanta Resources
Plc to curb power demand by 30 percent, reducing output
from an industry that makes up about 12 percent of the
economy. Revenue is already under pressure after copper
prices dropped 20 percent in London since January.
"A drought-related power crisis in Zambia will further erode
the near-term fiscal and growth outlook," Clare Allenson, an
Africa analyst at Eurasia Group in Washington, said in an
emailed reply to questions. Power rationing "will undermine
economic activity not only in mining, but more broadly,
driving lower revenue collection."
Investors are starting to abandon Zambian assets, once a
favored bet because of the nation's stable political
environment and average economic growth of 6.8 percent a
year in the past decade. The kwacha has plunged 20
percent against the dollar this year, while the government
sold its third global bond last month at a yield of 9.38
percent, the most ever for an African issuer in the Eurobond
market.
In June, Finance Minister Alexander Chikwanda cut his
forecast for economic growth this year to 5.8 percent from
more than 7 percent, a month before the start of 8 hours a
day of power rationing.
Taking electricity reductions into account, expansion could
be 4 percent or less this year, which would be the slowest
pace since 2000, according to Mushiba Nyamazana, an
economics research fellow at the University of Zambia.
The power crisis is also compounding problems for farmers
already suffering from a 22 percent decline in this year's
corn crop, increasing the risk of food shortages and higher
prices, said Kingsley Kaswende, a spokesman for the
Zambia National Farmers Union.
While mining companies have the option of importing power,
that will cost them more than three times their normal
tariffs. The government is seeking to add 60 megawatts
from the Itezhi Tezhi hydropower project by the end of the
year and get power from a 300-megawatt coal-fired plant in
the Southern province from the middle of next year.
"The accumulation of risk factors threaten the viability of
mining operations," Irmgard Erasmus, a NKC African
Economics economist in Paarl, South Africa, said by e-mail.
Zambia will enter its hottest months in October and
November, said Siatambika, and even when the weather
turns wet, which it normally does in late November, there's
no certainty the water level will be restored immediately.
After "1995, the water stayed low for three or four years," he
said, standing on a sandbank on Lake Kariba and looking
out into the afternoon sunlight. "It didn't just come back."
Source:arabnews
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