By Cathy Maulidi:
Barely a week after Electricity Supply Corporation of Malawi (Escom) announced a 16 percent tariff increase and amid soaring cost of living, Malawians are facing a potential wave of increased water charges.
The country’s three regional water boards have submitted proposals for substantial upwards tariff adjustments.
According to the documents that we have seen, the Northern Region Water Board (NRWB) is seeking the most significant increase, a 55 percent jump.
The Central Region Water Board (CRWB) has requested a 45 percent rise, while the Southern Region Water Board (SRWB) is proposing a 35 percent increase.
In a proposal we have seen, the CRWB details the rationale behind its proposed 45 percent increase, stating that the adjustment is crucial for achieving full cost recovery.
“The Board proposes an average upward adjustment in tariff of 45 percent… in line with the approved roadmap to a full cost recovery tariff,” the submission says.
CRWB has also emphasised the potential negative consequences of not implementing the increase, projecting a net loss margin of 19 percent.
“Without tariff upward adjustment of 45 percent, the forecast financial performance indicates that CRWB will post a net loss margin of negative 19 percent,” reads the document.
The board further outlines the financial implications, noting that the current average selling price of K1,228.48 per cubic meter for the 2025- 26 financial year would be significantly lower than the total cost of production, estimated at K1,463.40 per cubic meter.
This difference, according to CRWB, would result in a loss of K260.19 per cubic meter. The proposed 45 percent increase, the board argues, would raise the average selling price to K1,752.48 per cubic meter, exceeding the anticipated cost of production and generating a positive tariff cover of 16 percent.
The board also cited inflationary pressures on operating costs, noting that the National Statistics Office (NSO) forecasts a 31.4 percent increase in input prices.
“The board has, therefore, taken into consideration the inflation rate in the tariff build up and customer affordability,” CRWB said.
Furthermore, CRWB emphasises the importance of the tariff adjustment for improving its financial standing, enabling timely salary payments, meeting statutory obligations, and servicing loan repayments.
“The board has outstanding loans from the International Development Association (IDA) of the World Bank and the Opec Fund for International Development (OFID) for water supply projects. In the 2025/26 financial year, the total loan re-payment amount to K886 million,” the submission reveals.
CRWB also explains how the additional revenue would be used. It says the board plans to expand services to new customers through free water connections, replace aging water meters, improve maintenance and fault response times, invest in backup power systems, and establish a customer care system.
The NRWB, in its submission, presented a similar case, stating that its current revenue of K1,576.00 per cubic meter is far below the K3,500.00 per cubic meter needed to cover costs hence need for the increase.
“NRWB requires about K3,500.00 per cubic meter to meet its costs against an average of K1,576.00 per cubic meter revenue it generates based on prevailing tariffs. NRWB applied for a 55 percent water tariff increase as a strategy to close the gap,” the NRWB submission said.
The submission however states that the 55 percent tariff increase will not include low-income customers that are served through communal water points (Kiosks) but individual customers and others.
A submission by SRWB and signed by its Chief Executive Officer Duncan Chambamba proposes a 35 percent increase.
Reacting to the development, chairperson for the Legal Affairs committee of Parliament, Albert Mbawala, said the committee is concerned with the plight of the water boards especially their financial performance.
However, he said the water suppliers also have to think about Malawians who are already going through hardships.
“Yes they need to increase the tariffs but at the same time there has to be a balance looking at the economic position and the situation our people are in.
“So maybe if we can meet half way other than going straight to 55 or 45 percent. That’s too much for our people,” Mbawala said.
Minister of Water and Sanitation Abida Mia asked for more time before responding to the matter.
“Let me get my hands on the proposals first; then I will get back to you for a comment,” Mia said.
