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BLANTYRE-(MaraviPost)-The country’s consumers right body Consumers Association of Malawi (CAMA) condemns in strongest terms the comments made by the World Bank demanding an increase on electricity tariffs.
CAMA says Word Bank needs to understand that matters related to electricity tariff increase are handled through a Regulatory Body and that the Malawi Energy Regulatory Authority (MERA) conducts consultative meetings with all key stakeholders before a tariff is approved.
The consumers body outburst comes bare two days after The World Bank advised the Malawi Government to consider increasing electricity tariffs to make Electricity Supply Corporation of Malawi (ESCOM) financially sustainable and attract investment in the power sector.
The bank made the recommendation during the launch of its latest Country Private Sector Diagnostics (CPSD) report for Malawi which Vice-President Saulos Chilima officially launched on Tuesday, October 26, 2021 in the capital Lilongwe.
But in a statement made available to The Maravi Post on Friday, October 29, CAMA’s Executive Director John Kapito observes that World advise has no basis and unjustified.
Kapito observes that “The Malawi Energy Regulatory Authority takes into account key economic and social fundamentals when conducting and reviewing tariff increases. While advice is accepted from all stakeholders including the World Bank, it is important for such advice to come through appropriate channels and platforms.
“We would have appreciated the advice from the Word Bank if it was done through the Ministry of Energy and the Malawi Energy Regulatory Authority in Camera other than creating speculation and confusion on prices of goods which might be triggered by an anticipated electricity tariff increase”.
He added, “The methodology for electricity tariff increase is done through a transparent legal framework using the Energy Regulatory policies and Act guided by MERA, and through the use of such guidelines MERA is able to determine a tariff that is economically and socially good for ESCOM and Consumers.
“There are a number of considerations that MERA puts in place and key among them is to ensure that ESCOM operations are sustainable and also the consideration of environmental issues and ensuring that supply of electricity to Malawian Consumers is affordable and this is based on a cost recovery tariff.
“The World Bank unfortunately, is only using one single consideration which is opening up the market for other electricity generators and distributors to enter the Malawi market without taking into account how a higher tariff would hurt Malawian Consumers.
“The credibility of the World Bank throughout the world and especially to poor countries like Malawi has been pathetic where most of the policies and advice have ended up creating poverty amongst citizens. Malawi is different from the developed countries where tariffs of a strategic product like electricity cannot be left to market forces and we don’t expect the World Bank has the integrity to educate Malawians regarding general prices of goods and services on the market,” says Kapito.
He argues, “We would wish to appeal to the World Bank to stop engaging and confusing Malawians in the name of providing advice and wish if they conducted their various activities in providing advice to our leaders in Camera other than wishing to humiliate Malawians by conducting public press conferences that may trigger unnecessary anger and misunderstandings”.
Titled The Road to Recovery: Turning Crisis into Economic Opportunity, the World Bank report examines opportunities and constraints in four key sectors of energy, digital infrastructure and services, transport and logistics and agribusiness.
The bank identifies the four sectors as key areas where private sector solutions can create or expand markets and make substantial contributions to development impact.
