CTI blasts tariff hike, TCCIA to meet soon


JF-Expert Member
Feb 11, 2007
CTI blasts tariff hike, TCCIA to meet soon

By Polycarp Machira and Samuel Kamndaya

Members of the business community have attacked the 21.7 per cent hike in power tariffs, saying it will make local industries uncompetitive in both local and international markets.

They argue that such an increase will raise production costs not only for industries, but other socio-economic activities as well, adding that the raising of connection charges will be a burden to consumers, thus increase the cost of living.

A statement issued by the Confederation of Tanzania Industries (CTI) criticised the tendency to hike electricity tariffs while the quality, consistency and reliability of power supply remained unsatisfactory.

The manufacturers were generally supportive of a moderate increase of about ten per cent due to unreliability and inconsistency of power supply," the statement said, brushing aside the 40 per cent increment proposed by Tanzania Electric Supply Company (Tanesco).

The current power tariff hike is another bone of contention between CTI and the Government after the recently announced minimum wages for the private sector.

CTI recently announced that up to 150,000 people currently employed by the private sector will become jobless come next month if no consensus is reached between employers and the Government on the recently announced new minimum wages.

The confederation said recently that it supported the idea of increasing salaries but decried an increment of more than 300 per cent, saying it was not economically viable among private sector employers.

It is estimated that the entire private sector employs about 500,000 people and therefore if no consensus is reached, up to 30per cent of the total workforce in the private sector would be retrenched.

Massive layoffs will mainly come from the labour intensive sub-sectors, which include the textiles and fish processing, CTI cautioned.

The confederation urges the government to develop alternative and cheaper sources of energy such as gas, coal and solar power. CTI also emphasized that the �unbundling� of Tanesco be speeded up, referring to plans to split the company into three firms for generation, transmission and distribution.
The confederation similarly called for more incentives to attract private sector investment in power generation. Industrialists have also challenged the Government to hasten the buying out of independent power producers whose capacity charges continue to be a burden to Tanesco.

On the other hand, CTI foresees 2008 as a difficult year for manufacturers and economy in general, following the start of application of the minimum wage and new electricity tariffs on January

On its part, the Tanzania Chamber of Commerce, Industries and Agriculture (TCCIA) said that the chamber would give its position in the first week of January.

TCCIA president Aloys Mwamanga told The Citizen by telephone yesterday that members of the chamber would hold an ordinary meeting in Dar es Salaam after the New Year, with the power hike issue high on the agenda.
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