Consumers Association of Malawi (CAMA) Executive Director John Kapito has said the downward reversal of water and electricity tariffs will have ‘a huge positive impact to cushion consumers’ while, at the same time, boosting economic growth.
Speaking in an interview on Monday, Kapito commended President Dr. Lazarus McCarthy Chakwera for directing the downward reversal of the tariffs, stating that the Head of State has helped the majority poor to still have access to water and electricity services during these difficult economic times.
“The downward reversal of water and electricity tariff has a huge positive impact to cushion consumers. Water and electricity are some of the big drivers of the economy; thus, increases in water and electricity would have exacerbated price increases of many products on the market,” he said.
Kapito added that the increase in prices for the two commodities would have denied many consumers access to water and electricity.
“This is a huge relief to consumers at a time when prices of almost all basic goods have gone up,” he emphasized.
In his reaction, renowned Governance and Human Rights Advocate Undule Mwakasungula said President Chakwera’s decision to reverse the tariff provides much-needed economic relief by reducing the financial burden on households, particularly for essential services like water and electricity.
Mwakasungula said this will have a direct and positive impact on the disposable income of citizens, enabling them to allocate resources to other pressing needs.
“Furthermore, this decision promotes social inclusion by ensuring that essential services remain accessible and affordable to all. This approach is important for achieving social justice and ensuring that the benefits of such decisions reach the most marginalized Malawians,” he narrated.
However, Mwakasungula stated that while the decision is undoubtedly beneficial to consumers, it poses significant challenges for the operational sustainability of Water Boards and ESCOM as the two entities heavily rely on tariffs to cover their operational costs, maintain existing infrastructure, and expand their services.
He feared that a reduction in revenue due to lower tariffs may jeopardize their ability to invest in improving services and infrastructure.
“The President’s decision is a short term measure and the government must however look at an ideal long term solution that lies in finding a delicate balance between providing economic relief to consumers and ensuring the financial sustainability of water boards and ESCOM,” he said.