Cost of living shoots up

The Jesuit Centre for Theological Reflection (JCTR) Basic Needs Basket has revealed that the cost of living for the month of March 2014 for an average family of five living in Lusaka increased by K71.44 from K3,616.28 in February to K3,687.72.

The JCTR has attributed the increase mainly due to the rise in the cost of Mealie meal which increased from K68.00 to over K82.00 per 25kg bag of breakfast in some parts of the country.

The JCTR further urges the government to ensure that the price of mealie meal does not increase any further as it will adversely affect and exacerbate the already eroded coping capabilities of the majority of Zambians who depend on this staple food and often have very limited escape opportunities from the poverty trap.

Below is the full press statement

Mealie meal which is a staple food in Zambia must to be readily available to the greater majority of the citizens. However, during the month of March, the price of breakfast mealie meal sharply increased from ZMW68.00 to over ZMW82.00 per 25kg bag in some parts of the country making it difficult for many to access the commodity.

The high cost of mealie meal is very saddening and alarming especially for a country whose staple food is maize. The increasing systematic exclusion of families in accessing a 25 Kg bag of maize meal has been compounded by the reality that over 60% of the population is living in absolute poverty and depends heavily on maize and maize supplements for their dietary needs. Further, it has been observed that the price of mealie meal remains high despite the various interventions by the government.

The free falling Kwacha has also contributed to the high cost of mealie meal due to the increase in the cost of importation of production related inputs needed by millers. This has adversely affected people’s livelihoods and coping capabilities as it inadvertently pushes up the cost of production of goods and services thereby making the cost of goods and services beyond reach of ordinary citizens.

The cost of living has generally increased owing partly to the fact that key accounts of inflation which include prices of basic food items and non food items have continued rising. The Central Statistics Office (CSO) Report, The Monthly for the month of March affirms that annual food inflation has risen by 0.1 percentage point from 7.5 % to 7.6% while non-food inflation rate has increased by the same rate from 7.7% to 7.8% from February to March 2014. This simply means that there is an upward thrust on the average prices of goods and services particularly over the first quarter of 2014 as evidenced by both the rising cost of Basic Needs Basket (BNB) and the CSO Consumer Price Index (CPI) for the months of February and March 2014.

JCTR is concerned with the rising cost of living due to its adverse effects on majority of the citizens as evidenced by the failure of some families to meet the cost of a 25Kg bag of maize meal. Survey findings from peri-urban markets show that there is a sharp increase in demand for small unit repackaged mealie meal popularly known as Pamela. This is indicative of the systemic increase in the number of families living from hand-to-mouth in peri-urban areas. Local traders of the commodity justify the high prices on grounds that millers have not reduced the wholesale price despite government intervention.

Therefore, on a general scale, the cost of living for the month of March 2014 as measured by the JCTR’s Basic Needs Basket for an average family of five living in Lusaka stood at K 3,687.72. This reflects an increase of K71.44 compared to the month of February 2014 when the basic needs basket stood at K3, 616.28. The increase is mainly due to the rise in the cost of Mealie meal. However, there has been a minimal decrease in the price of beef from K30.58 to K29.36 per Kilogramme which translates into a net decrease of K1.22. Conversely, during the month under review, the price of onion, due to the commodity’s season induced scarcity is showing an upward price trend from K6.12 to K8.78 per Kilogramme.

The government must therefore intervene, both in the medium and long term, in the rising cost of mealie meal bearing in mind that Maize pricing is overtly over-sensitive to market forces and weather patterns.
Further, the JCTR urges the government to ensure that the price of mealie meal should not increase any further as it will adversely affect and exacerbate the already eroded coping capabilities of the majority of Zambians who depend on this staple food and often have very limited escape opportunities from the poverty trap. Additionally, we urge the government to ensure a stable macro-economic environment buttressed on consistent and sound economic policies rather than political imperatives. We also add that the depreciation of the Kwacha must be squarely addressed as millers are transferring the cost to the consumers.