BY MISHMA CHAKANYUKA/RUTENDO MATANHIKE
Power utility ZESA Holdings yesterday revealed that it had incurred exchange losses of up to $4 billion since February, when the central bank liberalised the exchange rate.
The Reserve Bank of Zimbabwe ditched the discredited 1:1 official peg with the United States dollar on February 20, and merged the bond notes and electronic dollars into a transitional RTGS dollar currency.
But the local currency has continued to weaken on the interbank market, and was yesterday trading at US$1: $14,42.
On the thriving black market, it was trading US$1:$20.
“In an environment where we have instability in terms of the exchange rate, you can imagine what is happening to Zesa. We have made a proposal for a review of tariffs and our tariffs should have an adjustment formula that will kick in whenever we have fiscal variables like the exchange rate,” acting managing director Milton Munodawafa told the Parliamentary Portfolio Committee on Energy and Power Development.
“Each time there is movement, we experience exchange losses and right now, we have exchange losses amounting to $4 billion, so the figures that I expect to see at the end of this financial year are horrendous. We just have to manage the issue through the tariff adjustment formula that I have just discussed and we intend to review the tariffs after every quarter (three months).”
He said they were also encountering exchange loses in terms of the money they are owed by their customers which people are now paying back in the local
“People who owed Zesa when the exchange rate was 1:1 are paying using the Zim dollar. We were owed US$1,2 billion by our customers when the exchange rate was introduced,” Munodawafa said.
“I did some calculations about two months ago and we had lost value amounting to US$900 million and I think in terms of loss it amounts to billions of dollars because where we had US$1,2 billion, we now have ZWL$1,2 billion. Even if we are to collect that ZWL$1,2 billion it will not assist us in a big way.”
He said Zesa was still importing power and that they paid balances using the foreign currency they get from locally-based exporting companies.