That the commissioning of the 55 megwatts (MW) generators on January 31 2018 would increase power tariff by 24.67 percent was known a long time ago.
The Malawi Energy Regulatory Authority (Mera) already approved the increase as requested by the Electricity Supply Corporation of Malawi (Escom) on condition that the generators were operational. President Peter Mutharika commissioned the 55 MW gensets in Blantyre on Wednesday this week, effectively giving Escom the green light to start billing electricity consumers by an additional 24.67 percent.
The added power to the national grid should essentially be good news to consumers. As Escom board chairperson Perks Ligoya announced the additional power will reduce load shedding to 4 hours a day from only having power eight hours a day. This was bad not only for domestic use but also for businesses.
The additional power, though coming at a cost, is indeed a relief to the manufacturing sector which turned to the use of diesel powered generators which are more costly to run. But now with the official increase in power tariff across the board, people should expect price increases for many more products. Some unjustified. While it is a better devil to have products albeit expensive than not to have them (as some firms were downsizing and closing shop altogether with only eight hours of electricity per day), some unscrupulous manufacturers will now take advantage of the higher power tariff to raise prices of their products not in tandem with the cost of producing the products.
Admitted we are in a liberalised market, but government, as a duty-bearer, has a duty to ensure that consumers are hedged from exploitation. It is the reason government established some regulatory authorities in some sectors such as energy and communication. Mera and Malawi Communications Regulatory Authority (Macra), are two such organisations. For example, at the height of the power blackouts, gas manufacturers, wholesalers and retailers such as Afrox could easily have taken advantage of the shortage of power to hike prices of their products. But the firm being regulated by Mera, kept its prices affordable. Commercial banks have the central bank watching over them. Big Brother would not allow exploitative prices for their products and services although they spend more when run on gensets.
Unfortunately, there is a conspicuous absence of regulators in many sectors in the country. As a result, some firms in the unregulated sectors will charge a leg and an arm for their products and services. Who, for example, checks on prices of products and services in the hospitality industry? The Malawi Bureau of Standards (MBS) will check on quality in the production process but stop short of going a mile further to see if the finished product is worth the price the consumer pays for. Who regulates prices of cement?
I doubt if checking on exploitative prices of products and services falls within the mandate of the Fair Trading and Competitions Board (FTCB).
Water is life, but nobody really checks on the water supply sector (water boards) so that they don’t exploit water consumers. This is despite the fact that the Malawi Government through its Department of Water Development is supposed to keep a watchful eye on such unscrupulous practices. If anything, government is just too excited to swell up its coffers when it collects value added tax (VAT) on anything that the consumer or buyer pays for. Granted, the Consumers Association of Malawi (Cama) is not a semi-government entity like Mera or Macra to be policing against unscrupulous tendencies by service providers. But previously it used to do a noble job of guarding against exploitative tendencies. Now it is as dead as a dodo.
Nobody regulates pricing in the passenger transport sector, be they by mini-buses, omni-buses, water transport vessels, rail transport, air transport.
It is high time government started spreading its tentacles more widely and brought a semblance of sanity and uniformity in the manner various sectors price their services and products. The question is: Why are some sectors regulated and others not? This dichotomy in regulation (and lack of it) when it comes to product pricing is breeding too many Shylocks who are skinning us alive.
