Mthuli decries uneconomic prices for public goods, services

Business Writer

FINANCE and Economic Development Minister, Professor Mthuli Ncube, has said there is an urgent need for “appropriate” pricing of public goods and services, such as electricity, water and fuel to reduce the subsidy burden on the Treasury.

In the Budget strategy paper for 2023, Mthuli said appropriate pricing would also provide the scope for maintenance and new investments in critical national assets.

For sometime now, depressed prices of electricity and water have been blamed for poor service delivery.

Public transporter, Zimbabwe United Passenger Company and farmers under state-assisted farming programmes are getting subsided fuel.

Government has tried to keep the prices of critical services such as power as low as possible to cushion consumers.

Last week, ZESA executive chairman of ZESA Holdings, Dr Sydeney Gata, said at the current electricity tariff, the power utility was failing to refurbish the generation, transmission and distribution to improve on service delivery.

Energy and Power Development Minister Zhemu Soda recently said Zimbabwe’s power situation would remain “fragile” in the absence of an economic tariff, which continue pushing up “unproductive” demand and reckless use of electricity.

Some economic analysts say the underpricing of critical services will continue exerting more pressure on the Treasury, which often ends up chipping in with bailouts.

Mthuli said the Government would work towards “rationalisation of public expenditures…by identifying and removing expenditure overlaps and waste.”