The economic costs of electrical power outages in Eswatini

Abstract

Eswatini has been experiencing power outages that have muted the country’s efforts to increase access to electricity. As it stands, electricity supply is unreliable which has resulted in harsh penalties and costs to the economy. Using a sample of customers from both the residential and business sector, this study assessed the economic costs of power outages in Eswatini. The costs of power outages on the residential sector as a proportion of Eswatini’s gross domestic product were found to be 1.67% using the Direct and Indirect Cost Method. Using a binary logistic regression, the study identifies weekly frequency of power outages, perception of current price of electricity, possession, and maintenance cost of back-up equipment to be associated with consumers’ willingness to pay for improved supply. Under the business sector, the industrial sector reported the highest direct costs compared to the other sectors, which shows that it is the sector which is mostly affected by power interruptions. It is clear that the challenges experienced by the Eswatini electricity sector have resulted in high costs to the economy. The paper therefore recommends the need for policy attention towards improving the electricity sector through investments in electricity generation by renewable energy sources, expedite the promotion of decentralised electricity generation to vulnerable areas, and setting of standards for the generation and distribution of electricity.

Keywords: Energy; Power Outages; Economic Costs; Eswatini.