A Lusaka-based economist says there is no indication that inflation levels have dropped.
Mr Chibamba Kanyama pointed out that the Credit crunch has caused an increase in prices in all commodities such as energy, Mealie Meal and other essential necessities.
He said it is not right to show inflation levels based on hotel and tourism because most essential products are trading at very high prices.
Mr Kanyama pointed out that price levels have increased to an extent that it is hard to sustain companies, and most likely, more workers will be laid off.
He said this in an interview with ZANIS in Lusaka today.
Mr Kanyama said he sees a situation getting worse because prices will continue to rise adding that the cost of living will go up.
He observed that Lusaka and Copperbelt residents are finding it hard to support their families because there is no cash in their pocket.
Mr Kanyama said liquidity of banks is another area of concern, saying issue analysis is showing that narrow products are not cheap any more but expensive.
He pointed out that inflation levels are higher than last month, adding that it is not possible that inflation levels are most likely to keep going up.
Mr Kanyama said input cost is not tallying with labour because most companies will need to increase their salaries to match the prices of commodities at market levels.
He observed that more retrenchments will be carried out because there is no pocket power at household level.
ZANIS/ENDS/VP/
Mr Kanyama stop bluffing! As an Economist,tell us the way forward instead of your usual rhetoric day in,day out just explaining things we already know.
What does Chibamba Kanyama expect? A miracle? even stimulus packages are not offering solutions at all.
Relative to what,sir? put figures to the comments. So what is ‘low’ in his opinion?
PART I
Evening Sharp shooter, Thenjiwe Stev and Straight
A few days ago, we were told that inflation had reduced by 0.9% have prices really reduced for the common man? they said the major contribution to this decrease was the reduction of air fares across the country!!!!
Look out for Part II, III & IV
Chibamba is disputing the CSO’s Director’s statement last friday that Zambia’s inflation rate is down by 0.9%. Our leaders are painting a rosy picture of things and yet people are starving. There’s such a disconnect with reality amongst our leaders, whose main focus is basically their own pockets.
#4 Mwana Muchende,Good evening
This ZNBC news reader turned economist, yaba!!. Mr Chibamba, I don’t know maybe you need to go back to school. Listen sir, Zambia is using inflation targeting and there is a basket of goods that goes into that basket and is agreed upon by all stake holders. So if the collective price of that basket falls for that period, then inflation has fallen. This is transparent and anybody can calculate this. It is the same system used by all countries that use inflation targeting. If your Chibuku shakers goes up by 200% and it is not included in the inflation basket calculation, sorry it wont affect inflation calculation as agreed by stakeholders for a particular period..CONT’D
Chibamba is right.so “prepare for hard times ahead.”
CONT’D #7.. What CSO reported is actually what they call core inflation and is correct. maybe talk about food or fuel inflation, then you will be talking about another issue totally. As for your future sentiments, you are just speculating now. It wise to look at the current figures and that is how we measure inflation. As an economist, leave speculation to market traders. Economist we work on data. So please, stop misleading people. Anybody who has time and can measure inflation in Zambia. It is not complicated. Am sure Prof Free-market Capitalist would help me here.
BTW isn’t this the man who was saying on TV that we LT bloggers are under archivers and is this the best hes got?…
I disagree about the indication that the Credit Crunch has caused an increase in prices of all commodities. Mr Chibamba Kanyama, please explain to me the meaning of the terminology “Credit Crunch”. Also, indicate exactly how it has caused the increase in prices you have referred to.
On “Mr Kanyama said input cost is not tallying with labour because most companies will need to increase their salaries to match the prices of commodities at market levels. He observed that more retrenchments will be carried out because there is no pocket power at household level.” you are however right. The increase of electricity tariffs by 66% by ZESCO and GRZ will even make things worse. SAD…
#7,yes It is the same self-proclaimed achiever Chibamba Kanyama.He claims to be an educated Economist but his analysis proves the opposite.I cant wait for free-market capitalist for his in-depth analysis.
CONT’D from #8, ..Is this the best he has got? Wow. It is very very dangerous for an economist to make statements based on emotions. You need to put hard figures on the table before you mourn that inflation has not fallen. Or maybe you have a speculator inside you screaming to come out. Leave economics to level headed people who can objectively look at the numbers and let the figure do the talking. I believe that is what the guys at CSO are doing and you can check their data and verify if they are lying. Once again Mr Chibamba, stop misleading the masses.
Chibamba Kanyama should analyse issues like the economist he claims to be. His explanations are not interally consistent and just involves the mention of terms. He remains me of a bush mechanic who claims to be a qualified to fix a car by say “Boss kufunika sipana, bobojane and crankshaft”. The question is how do they work together. EG how has the global crisis affected the price of maize? Thats fake. Also, has he gone round Zambia to check prices to dispute the findings of CSO. What he should be saying, and which is a fact, is that the composition of the CSO commodity basket from which is computes inflation is outdated. I think it is based on the 1992 weighs before things like cell…
Hey Chinondo you have a point on the exclusion of some commodoties in the commodity basket of inflation. However, a few things need to be corrected. Zambia does not use inflation targeting. In the region its only SA and Mauritius. In Zambia we use monetary targeting. Meaning the central banks changes moeny supply to reach a targeted inflation rate. Also, the compositon of the basket is not decided by stakeholds but is the ouitcome of a survey of expenditures taken periodically. CSO should condcut one next year with the census. Lastly, core inflation is just headline inflation minus the share of food and fuel. In Zambia it is the latter which is most discussed.
# 12 should read “I think it is based on the 1992 weighs before things like cellphones and talktime.”
I like this…….next time Mr. Kanyama visits this blog,I guess he’s going to be thrilled!!
Good analysis,folks………keep it up.The only fun thing to me is that it seems like economists are constantly arguing……why’s it so difficult for you guys to reach a compronise???
#12 Zed Economist, thanks for the correction. You can see that am too much into South African economy. Well now you know where my money is. Good nite, need to sleep, had total carnage today on the JSE, blood all over. With the DOW bleeding the way it has today , looks like we have another bumpy ride tomorrow. Wish me good luck
#15,there are two types of Economists i.e Normative and Positive.Normative economists will never agree on a single issue whereas as Positive economists argue and later on agree on the issue based on facts.It is for this reason that the Nobel prize committee only awards positive economists.
Good night everyone and stay blessed.
12, Zed Economist, while I appreciate your points, I totally disagree on the suggestion that the CSO of Zambia has outdated data or information of the class of 1992 simply because I have contacts to CSO field workers who move across towns especially provincial capitals every month or so collecting data which they feed to the CSO near UTH in Ridgeway to produce the calculated monthly food basket figures and hence inflation.
Among the GRZ branches, I have confidence in the statistics from CSO because I know some UNZA colleague who participates in the data manipulations to come up with the final figures you read in the media.
Prepare for hard times.
Chibamba Kanyama’s statement is very true in the development countries cases. The financial crises has driven up the inflation rates and that has meant increase in the prices of commodities.The Central banks of developing countries like Zambia are not able to cointain the macro economic dynamics and the result is the negative outcome of major economic indicators.The government has called upon IMF and the World Bank to provide Stand By portifolios to meet the balance of payment deficit.This totally a different scenario for
Maestro, mushos gracias. Your contribution is appreciated. But I ask of you a favor. Ask your contact at CSO and UNZA what share talk-time has in the inflation composite basket. Or if the weights of the different commodities such as kapenta and rent have changes since the early 1990s. If the answer to any of these questions is ‘No’, then we need to undertake a commodities survey to determine what constitutes a representative basket of consumer expenditure for a Zambian household.
Where did Chibamba do his economics??He just has a big mouth for public relations…..
Actually you bloggers here have done a better job in explaining the issue than him and you are not even in the country for that matter…..next time let him not insult the bloggers on LT because they are more exposed and informed than he is…he should go back to news casting bloggers! what do you think??
Having read Chibama Kanyama’s comments twice I understand his problem. He talks as if inflation is the measure of the level of prices i.e. whether the price is high our low. No Sir. Inflation measures the rates at which prices are increasing. In this were the case, then the cost of living here in Washington DC would be low since inflation is below 3% compared to Lusaka’s double digit rate. This is not the case. We do not pay $1500 rent for a flat in Lusaka.
Abantu bachula pafula.
PART II
From the small knowledge in economics an increase in money volumes should have a corresponding increase production. (MV=PQ) I strongly believe that this inflation reduction is just a white elephant on paper. I have not seen any production increase that they can claim that Inflation has reduced.
Good morning Jamaco,
It makes more sense then to subsidise production and not consumption if this increasing inflation is to be controlled. Money, commodities and services will become cheaper and i this is the only time that someone can tell me that there has been reduction of inflation. Bear in mind that Zambia is one such country that has most of its citizenry basking in low disposable and discretionary income
In Zambia, anyone can comment on the economy, agriculture, inflation, poverty..etc, etc as they wish.
Good morning Mwana Muchende
worrying case indeed. No one even talks about wage increase so that those who work for little money can be sustained.
PART IV,
We all know the ghastly effects that inflation has on individual consumption and national development. At one time in the Chiluba regime goverment alloted enough resources to build a dual lane between Lusaka and Kabwe. Remember what happened inflation hit as high as 147%. Alas the Lsk – Kb dual lane became just as long as 7 km from Kb round about and all the resources were used up
OK,
I don’t understand the above article. How does a recession correlate with high prices. It does not make sense to me. If he is talking about state controlled companies like ZESCO who have resorted to hiking prices then I can agree with him, but the fact is if people are not buying, prices go down to get rid of the surplus.
Mealie Meal (unless I am wrong) has gone down in price due to the govt sponsored 100% maize subsidy. Fuel has also gone down in price reducing the cost of doing business.
I am sorry but I do not understand the above observations by the above economist.
Unless he brings back this analysis after the ZESCO hike is implemented, I have to dispute his…
#29, Hi Jamaco,
That is what I meant in #2. Some stimulus packages have been implemented in some countries in order to encourage the masses to go shopping so the economy is boosted up. (Thats my limited brain-drain and storming on economics and inflation).
Sorry free capitalist but chibamba is wrong from all angles.In sure you know that the economy(in this case inflation) of the country is based not on one comodity or industry (zesco)but on a collective of suggested indicators.So if you have to come up with a sound agurement you have to consinder all the necessary aspects of the economic indicators.I understand as an economist opinions usually differ from one another but there have to be based on fact of past charecterists and current economical climate of the country.
I though partly agree with you on your second point as well as chinodo
Don pedro
I do agree with you but the reason I pointed out ZESCO is because electricity is a cost driver for many businesses. If electricity goes up, then prices are sure to follow this trend. This is just the way I see it. I know Electricity is not the only industry that can affect inflation but i’m sure you’ll agree with me that electricity is important for many businesses.
But I do agree with you.
Pass.
I don’t comment on non-science.
23 Zed economist, Merci Beaucoup. I will do my best on your assignment. Later.
So ba Chibamba, what is the solution to the economic problem, we all know that there is a problem, you dont need to remind us. All we need is the proposed solution from you, to help deal with the problem.
Ba Chibamba katwishi uko, in your attempt to sound economicish, you blurt out a lot of rhetoric coupled with nonsense! What sort of an economist are you? Even a grade twelve can say what you saying, and probably much better. Uliwabufi sana iwe. We the bloggers hereby challenge you to a debate to discuss the economic situation in Zambia. We will show you just what a useless economist you are! Atase!
Ba Moze,
This man go crazy.
Ba Honey, Amen to that! Kwaliba sure ati ‘ba Economist’? Of what? Like Sata once said, “of Faeces!”
Some of these issues should be firstly observed before commenting. CSO report is meaningless to somebody who need food on the table. First things should be studied insteady of cheating people. You are painting a wrong picture altogether.
Ba Moze,
This man go kill me o, warn him fast. Or else i might do somthing i might regrate.
please warn this dum man
This is an health discussion…….keep it up,ladies and gentlemen!!!
CSO inflation is an average. Each person have their own inflation, depending on what they spend their money on. Calculate your own inflation. How much have you spent each month on the items you normally consume in your house.
So brother Kanyama could be look at a different basket altogether.
We live in a very free Country. We enjoy boundless freedom of speech and expression. The more reason we allowed Mr Chibamba Kanyama to endless make bankrupt observations regarding the economy without offering possible solutions. There are many competent economists who have practiced for many years and have continued to do so today but we don’t hear them making wide comments and being quoted every break of dawn. The problem with Kanyama is that he has only recently gotten schooled and and is trying to catch up on lost time. He simply is a publcity seeker.
Here in the UK 2 inflation figures are generally used. One includes mortgages ie cost of accommodation, the other does not. Recent figures were contrary to expectations. People expected inflation to fall but only the inflation including mortgage did. The other went up. Reason, UK£ devaluation. People underestimated the impact of the devaluation, which have pushed up cost of imported food despite reductions in bank interest rates.
Your basket composition does matter.
Dear Economists, I stand the story is actually distorted and does not truly reflect my comments I gave the young lady as she interviewed me via phone.My argument is purely on the context of the drop in inflation.The drop in hospitality industry prices reflects the drop in the business and not cost of living.Data should have context.
I certainly agree with those calling for a revision of the basket of goods used by CSO to come up with their inflation figures. It’s definitely one of, if not the major cause of the disparity between what people’s experiences with their budgets and what’s reported…a well represented basket would imply that when inflation is reported to be on the rise, it is directly reflected in one’s budget and vice versa. No wonder the layman in zambia is never convinced about any stories of inflation..it would make no difference to many zambians whether inflation figures were announced or not..on perhaps what the FED and BOE would see as a positive note, atleast we dont have to worry about…
I take it that #48 is Chibamba Kanyama. I can see that you are still mixed up about what inflation measures. When inflation goes down from say 16 to 14 % it does not mean prices are lower but rather that the annual rate of increase in prices has slowed down. Inflation is an acceleration. Its like driving on a road and you slow down as you pass over humps. Note you are still moving (price increase) but you have decelerated (lower inflation). By the way if you stop and start driving in reverse now you have deflation which is normally a concern in developed countries during a recession.
If #48 is really Chibamba Kanyama, my advice is STOP giving unresearced interviews on the phone. As you can seen you have found yourself in knot.
Dear Washintonian,
I know about all you have explained (and every economist does!). But practically speaking, the input costs have risen astronomically in recent months in view of the depreciated kwacha and these have translated in an acceration in price changes. I still contend that the inflation figures released by CSO are misleading for they are based on a basket tilted on items of little significance. Air ticket prices? For Weston Mubanga, the problem had nothing to do with phone interview but a journalist who did not understand what I was explaining. I give interviews to international media many times via phone but never experience distortions.
This is specific to Weston Mubanga. I know you are uncomfortable with my shallow viewpoints on economics. By the way, I graduated from same class as Chriticles Mwansa, Ballad Zulu and was lectured by prof. Seshamani, Dr. Musokotwani. You are missing the point on this one. I never follow journalists. They do. I have now gone the extent of publishing a short economic opinion on my website and they quote from there. others stil phone and just now, BBC is phoning on the mines. I refer them to an economist, they come back. Try to do the same. They will quote you. God bless you.