Impact of higher electricity tariffs on the profitability of electricity supply and distribution companies in Namibia.
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Date
2022
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Abstract
This paper presents the effect of increased electricity tariffs on the profitability of electricity
supply and distribution companies in Namibia. The Namibian electricity tariffs regarding
time-of-use, setting and pricing have been compared with others countries, regionally,
continentally and internationally. The time-of-use methodology and concepts benefit the
consumers in terms of low tariffs at off-peak times, and discourage high consumption at
peak time. This study investigated the way in which high electricity tariffs impacted the
profitability of electricity utilities in Namibia. It analysed and interpreted questionnaires
administered to thirteen employees of the three electricity supply and distribution
companies in Namibia. The results show that the high electricity tariffs had negative
effects on the companies’ profitability in the electricity supply and distribution sector in
Namibia. The results, furthermore, reveal that the electricity supply and distribution
companies in Namibia passed the increases on to their customers. Moreover, the study
concludes that there were factors that contributed to the high electricity tariffs, such as
political factors, sources of energy, the poor management of utilities and a shortage of
resources. There was no relationship between the electricity tariffs and profitability and
equity ratios.
Description
Masters Degree. University of KwaZulu-Natal, Durban.