Lusaka, Zambia – The Zambia Institute of Chartered Accountants (ZICA) has sounded the alarm over the devastating effects of the country’s ongoing energy crisis, urging the government and relevant stakeholders to take swift and decisive action.
In a press briefing attended by the Zambian Business Times, ZICA President, Yande Siame Mwenye, painted a grim picture of the economic repercussions of the frequent power outages. “The energy crisis has become a major threat to Zambia’s economic future,” she stated. “It’s time for the government to prioritize its resolution.”
Mwenye highlighted the significant impact on both domestic and foreign investments. “Investors, whether local or international, seek a stable and reliable power supply,” she emphasized. “The frequent blackouts have created an uncertain business environment, discouraging new investments and hindering the expansion of existing ones.”
The energy crisis has also taken a toll on key sectors of the economy. The mining industry, which accounts for over 70% of Zambia’s export earnings, has experienced production cuts of up to 15% due to power shortages. This translates into a potential revenue loss of nearly $500 million for the sector.
Agriculture, another critical sector, has also been adversely affected. The reduced power supply has disrupted irrigation systems, leading to lower crop yields. In 2023, maize production, a staple food crop, decreased by 20% compared to the previous year, exacerbating food security issues and increasing the cost of food imports.
Small and medium enterprises (SMEs), which employ around 60% of the workforce, have been particularly hard hit. The need for alternative power sources such as diesel generators has increased operational costs, straining the livelihoods of many Zambians.
The overall economic impact of the energy crisis has been profound. Zambia’s GDP growth slowed from 4.1% in 2022 to 2.5% in 2023, primarily due to the energy crisis. Unemployment rates have also increased, with the Zambia Statistics Agency reporting a rise in the unemployment rate from 11% in 2022 to 13% in 2023.
Mwenye emphasized the urgent need for immediate interventions to diversify Zambia’s energy mix. “The current situation is unsustainable,” she warned. “By prioritizing the resolution of the energy crisis, the government can safeguard Zambia’s economic future and enhance the well-being of its citizens.”
