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GOVT MUST SUBSIDISE SEC TARIFF INCREASE

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IT is easy, indeed convenient, to blame the Swaziland Energy Regulatory Authority (SERA) over the 15 per cent tariff increase it awarded the Swaziland Electricity Company (SEC) yet it is government that should and must be in the eye of the storm.  That is not, however, to exonerate SERA completely in this whole sordid affair.

While SERA might rightly claim that they are confined by the enabling legislation from broadening their scope when called upon to review electricity tariffs, the question always arises if they are not overly blinkered from looking at the bigger picture, especially how these impacts the economy. Indeed the initial reaction when SERA announced the 15 per cent tariff increase it had awarded to SEC was that they had failed to apply their minds and themselves in relation to inputs from the various electricity consuming publics.


As I see it, the final output of the whole consultation exercise appeared to have been geared to merely appeasing the various publics as if they had influenced SERA’s final decision with their inputs. But what is almost conclusive is that whatever contributions were made by these publics during the consultative process was not factored in when SERA ultimately decided on the quantum of the award. The long-term effect of this could be the erosion of trust between SERA and these publics when the latter looks at consultations by the former as superficial and a complete waste of time and resources, ostensibly, because their inputs are never considered in the final analysis.


Likewise, SEC is operating on a mandate, which is the bottom line, the realisation of profits. This mandate comes from the sole shareholder, government, through its board of directors. It is this mandate that is the basis for SEC’s strategic planning if it is to deliver on it in order to be in the good books of the sole shareholder. With the exception of wastage here and there, which is quite minimal relative to the capital employed and the returns, there is very little SEC can do to placate and endear itself to its various consumer publics because its hands are tied by government.


While there may be an appreciation of the negative impact of high electricity tariffs on the economy and, therefore, the kingdom’s development endeavours, between SERA and SEC, but this bigger picture is not within their scope. This is where government, which is in charge not only of SEC and SERA but the national economy and is the sole source, custodian and driver of the national development policy, comes into the party.


But as I see it, the problem with government is its traditional reactionary position instead of leading from the front. Government has previously coined nice sounding clichés, such as business unusual, that projected it as serious and business-minded only to disappoint because it has consistently failed to deliver on these. Instead what we have witnessed in most instances is a failure of leadership to rein in expenditure on absurd and unnecessary projects. 


In the midst and in the aftermath of a prolonged crippling drought government rallied around predictions of when the drought might end and a promise of a better harvest instead of knuckling down and coming up with rescue plans and interventions to remedy the situation. While livestock of subsistence farmers were decimated by the drought, government was reluctant to open its vast farms that are lying fallow to the dying animals only to shed a tear or two later. To date, government has not even worked out a strategy how it may assist subsistence farmers to restock.


The question of the drought is germane in this context because it is causal to the high electricity tariffs demanded by SEC. It is also common cause that high energy tariffs have a direct bearing on a country’s ability to attract foreign direct investments and/or, on the domestic front, diversification of the economy. And today the Kingdom of eSwatini rates negatively in almost everything from inflation to ease of doing business in the country that has led to a stagnant and worst performing economy in the region and beyond.


The responsibility of creating an enabling environment for economic development, attracting foreign direct investment, etc., falls on no one but the government. It is perhaps for this reason that government established service-delivery oriented parastatal organisations as agents of development than purely as profit-making entities. After all we were and still are a developmental state and this position is unlikely to change in 2022. Vision 2022, also christened First World Vision, is unlikely to be met because government the National Development Strategy (NDS), which called for political transformation for its realization. Under the prevailing political climate very little can be achieved because of skewed priorities that do not address national imperatives. Hence vast resources are being wasted on uneconomical and unsustainable projects that are aimed at projecting this country as a First World nation come 2022.


This explains why government has been deafening with its silence over the outcry sparked by the 15 per cent electricity tariff increase approved by SERA. Yet it could have intervened in many ways with the most practical action being to reinvest SEC dividends (profits) in the parastatal to ameliorate the high tariff increase. In fact for any people-driven government, this would have been the opportunity to re-evaluate all parastatal entities whose operations impact on national economic development to realign then to ensure cost-effective delivery of services as opposed to maximising profits that, after all, are wasted on unnecessary projects.  But that is the least of government’s concerns because not only is it not accountable to the people but is also immersed in a sick sub-culture of schadenfreude. 
 

 
 

 

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