Tanzania president reverses utility tariff hike, fires head of power firm

The decision by the Tanzania Electric Supply Company (TANESCO) to hike tariffs by 8.53% last week has resulted in the firing of the company’s boss, Felchesmi Mramba, by President John Pombe Magufuli.

Magufuli sacked the head of the state-run electricity company on Sunday claiming that the tariff hikes would stunt his plans to industrialize the east African country. The president also reversed the said hikes.

The presidency announced the sacking of the TANESCO boss in a press statement that read in part, “It’s unacceptable that while we are making plans to build manufacturing industries and ensure more citizens have access to electricity…someone else uses his position to increase power tariffs”.

The President subsequently appointed a lecturer at the state-run University of Dar es Salaam, Tito Esau Mwinuka, as acting managing director of TANESCO.

The power firm had initially sought an 18.19 percent tariff increase to arrest a loss-making trend and clear debts to independent power producers and fuel suppliers. The energy regulator however approved 8.53 percent which was less than half of what the utility said it needed to stem losses.

About 40 percent of Tanzania’s population of around 50 million has access to electricity and the government is aiming to push that rate up to 75 percent by 2025.

Since coming into office a year ago, Magufuli – referred to as the bulldozer – has sacked dozens of public officials as part of an anti-corruption campaign and a new drive to root out government inefficiency.

TANESCO has been unsuccessfully seeking loans from the World Bank, the African Development Bank (AfDB) and commercial lenders to turn the company round.

Despite reserves of over 57 trillion cubic feet (tcf) of natural gas, Tanzania has been facing chronic power shortages over the past decade due its reliance on drought-prone hydro-power dams.