Assessing Impact of Cost-Reflective Tariffs by ZESCO on Low-Income Households in Lusaka District between 2021 and 2026

Patrick Mbewe and Austin Mwange
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Patrick Mbewe: University of Zambia
Austin Mwange: University of Zambia

African Journal of Commercial Studies, 2026, vol. 7, issue 2

Abstract: Access to affordable and reliable electricity is essential for improving livelihoods and fostering socio-economic development, particularly in developing countries. In Zambia, where electricity generation is predominantly hydro-based, the sector is highly vulnerable to climate variability and prolonged droughts, creating persistent supply challenges for the national utility, ZESCO. This study assessed the impact of cost-reflective tariffs on low-income households in Lusaka District between 2021 and 2026. The objectives were to examine tariff changes over the period, evaluate their socio-economic effects on households, and identify coping strategies adopted in response to rising electricity costs. A mixed-methods approach was employed, combining quantitative data from approximately 384 households across Kanyama, Mandevu, and Chawama constituencies with qualitative insights from 10–15 purposively selected households. Data were collected through structured questionnaires and interviews. Findings indicate that cost-reflective tariffs significantly increased financial pressure on households, with 70% reporting reduced electricity consumption. Households adjusted usage patterns by reducing high-consumption activities such as cooking (32.7%), ironing (29.3%), refrigeration (13.0%), and lighting (7.6%), and 64.5% avoided peak-hour usage. The study also found widespread reliance on alternative energy sources, with over 70% of households using charcoal and firewood, raising environmental and health concerns. Additionally, 52.7% of households reported borrowing money to meet electricity expenses. The study concludes that while cost-reflective tariffs may improve utility sustainability, they impose substantial welfare costs on low-income households. It recommends targeted subsidies, energy efficiency interventions, and policy measures to balance financial sustainability with social equity.

Keywords: Cost-Reflective Tariffs; Household Socio-Economic; Electricity Consumption Behaviour; ZESCO (search for similar items in EconPapers)
JEL-codes: D12 H54 Q41 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:cwk:ajocsk:2026-67

DOI: 10.59413/ajocs/v7.i2.48

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