How Zambia’s Electricity Shortage Crisis is Impacting Businesses and Industries

Zambia is currently facing one of its most severe electricity shortages in recent years, with the economic implications rippling across the country. The prolonged drought, exacerbated by the El Niño weather pattern, has drastically reduced water levels at the Kariba Dam, the primary source of Zambia’s hydroelectric power. This crisis is affecting not just daily life but also threatening the stability of Zambia’s already fragile economy.

The Kariba Dam, which generates over 80% of Zambia’s electricity, is now operating at less than 10% capacity, as only one of its six turbines remains functional. For a country where less than half of the population had reliable access to electricity before the crisis, this shortage is a major blow. Households are struggling to carry out basic activities, such as cooking and lighting their homes, while businesses are suffering from production halts due to extended power outages.

For small business owners like Tindor Sikunyongana, who runs a welding business, the high cost of running backup generators is cutting deep into profits. Diesel prices have surged, making it harder for businesses to stay afloat. This has led to a significant reduction in productivity, which, if unresolved, could lead to layoffs and closures, further weakening the economy.

Zambian Industries Will Be at Risk

Industries reliant on continuous power supply, such as manufacturing, mining, and agriculture, are feeling the impact most acutely. Zambia’s mining sector, a major contributor to the economy, requires a stable energy source for operations, and prolonged electricity shortages could lead to a decline in copper production, one of the country’s key exports. This could weaken Zambia’s trade balance and reduce government revenue, which is already under pressure.

Additionally, the agriculture sector is not only battling the effects of drought on crops but also dealing with the power shortages that make irrigation systems difficult to maintain. Without electricity, farmers are unable to keep production levels up, which could contribute to rising food prices and increased inflation.

Why Energy Diversification Strategy Is Needed

Experts are urging Zambia to rethink its heavy reliance on hydroelectric power. Geoffrey Chiyumbe, Vice Chairman of the Energy Committee at the Engineering Institute of Zambia, has emphasized the need for a more diverse energy mix. “We need to look at incorporating both renewable and non-renewable energy sources to safeguard against future crises like this,” Chiyumbe stated.

By diversifying into solar, wind, and even natural gas, Zambia could build a more resilient energy infrastructure that would not only meet current demand but also provide a buffer against weather-related disruptions.

If Zambia fails to address its energy crisis, the long-term economic consequences could be severe. Continued power shortages will likely result in declining industrial output, job losses, and reduced foreign investment. Investors looking at Zambia’s economy are likely to view the ongoing energy crisis as a sign of instability, making them hesitant to invest in the country’s industries.

The Zambian government must take swift action to improve infrastructure and diversify its energy sources. Implementing energy policies that encourage the development of renewable energy projects and securing investments for non-hydro energy sources are critical steps that could help stabilize the economy.