Blackouts dampen Businesses output

Businesses have rued prolonged power outages, saying they are having a knock-on effect on their operations, forcing some to operate below their capacity while pushing others to spend more on alternative power sources.

Malawi Confederation of Chambers of Commerce and Industry (MCCCI) president Lekani Katandula said in an interview yesterday that currently, businesses are operating at half their capacities due to power supply challenges while incurring extra costs to run generators.

He, however, said the results are based on qualitative feedback the private sector lobby group is continuously getting from members as they are finalising a detailed survey on the cost of the electricity blackouts to businesses.

Katandula, who is also Illovo Sugar (Malawi) plc managing director, said: “Businesses are rarely depending on grid power for a higher level of their operations because it is unavailable, but gensets, which are expensive, thus making production expensive.”

Malawi is currently facing an acute power deficit, subjecting households and firms to eight-hour load-shedding following the damage of 130 megawatts (MW) Kapichira Hydro Power Station in January this year due to damage caused by Tropical Storm Ana.

The situation has forced Electricity Supply Corporation of Malawi (Escom) to ration the available power to industries and households.

At the peak of the electricity crisis, some small-scale businesses have also indicated that electricity has become a top obstacle to doing business, thereby affecting their profitability.

One such business is Press Bakes, owned by Rebecca Chinsima, who in an interview on Monday  said her business is struggling to remain afloat due to prolonged power outages.

She said their output has dropped by about 65 percent as production stops everytime there is power outage.

Said Chinsima: “For us loss of production time means failing to supply some orders to customers. This automatically slows down the overall growth of the business, increases the cost of production, resulting in low revenues.

“Going forward, it is even doubtful if we will be able to keep the eight people that we work with.”

For Agness Madula, who runs her maize mill in Bangwe Township in Blantyre, the story is the same.

She said persistent power cuts have pushed her to borrow money to ensure that the business survives.

Said Madula: “The revenues I generate from this business have drastically reduced by 45 percent yet I have bills to pay at the end of the month.

“I have been forced to borrow money to settle bills yet I am running a business which is ideally supposed to be sustaining itself.”

Similarly, Peter Bottoman, who operates a similar business in Chilomoni, said in an interview, he is struggling to make ends meet as he is forced to halt operations because they cannot run without power.

Speaking in an interview yesterday, Catholic University of Malawi economics lecturer Hopkins Kawaye described the current state of blackouts as having a huge adverse effect on the country’s quest to achieve the desired economic growth rate.

He said: “For an economy to grow, power is critical and the current situation has affected businesses at all levels.

“Even small businesses are equally affected to the extent that small entrepreneurs have had their very lifeline cut.”

Meanwhile, the Ministry of Energy said the country needs about 618MW to power industries and households without load- shedding.

The projected demand of 618MW is against the current Electricity Generation Company’s installed capacity of 539MW.

Ministry of Energy spokesperson Upile Kamoto is quoted as having said that to meet this demand, it requires intensive investment in firm power.

“This means constructing power plants that operate continuously to meet the minimum level of power demand 24/7,” she said.

Kamoto indicated that the Ministry of Energy is currently reviewing the Integrated Resource Plan to determine power needs and align with the Malawi 2063, the country’s long-term development agenda.