A journalist from Zambia News and Information Services on
Sunday 29th March, 2009 asked me about what I thought of
the announcement by the Central Statistics Office that inflation
(rate) had dropped in Zambia. Her view was that things were still very expensive and the poorer were becoming poorer.
My response (which was also given to an international news agency that interviewed me via phone):
It is true that many people, including myself will find it difficult to believe the inflation rate has indeed dropped in Zambia when we are experiencing the opposite. The CSO highlighted the reduction in air travel fares as having positively affected the inflation basket. There are not many Zambians who travel, and besides the airline industry has experienced a drop in travel.
The airlines have either not increased the prices in recent months while a few have reduced. One airline no longer exists and this may give an impression there has been an improvement in air travel costs. We needed a better context for the reduction in the rate so that we appreciated the overall impact this would have especially on the key items that have a significant impact on the inflation rate such as food prices, bus fairs, construction and fuel.
I was also asked on what would be the appropriate solution.
My response was that inflation is generally tackled from two fronts; fiscal incentives to industry that should encourage supply as well as monetary policy administered by the Bank of Zambia. The problem is that monetary policy is usually a short term measure as it uses interest rates to control money supply in the economy. The long term effect is that monetary has the potential of reducing output. The Zambian economy is not heating so; we do not need over-application of monetary policy. The experience has been that by targeting money supply, monetary policy has failed to arrest inflation triggered by food prices. There is a significant time lag between a reduction in money supply and consumer response on food in Zambia. People still consume where food is concerned.
The best way would be by identifying the transmission mechanism for inflation in Zambia, and as at now, the depreciation of the Kwacha appears to have accelerated the inflation rate. Zambia is an import dependent country for both raw materials and finished products, and prices for both finished products and raw materials have risen significantly.
Most manufacturing companies have for example adjusted prices except for those who market products that are highly sensitive to price changes; and in this case, companies will choose to manage the losses to maintain the volumes. But this goes with some cutting down on jobs. I am aware of many manufacturing companies that are responding this way. We have seen lately that by intervening in the foreign exchange market occasionally the Bank of Zambia manages to stabilise the inflation rate to tolerable margins, which is much more efficient than focusing on money supply. An injection of US $20 million in the market protects the Kwacha by about two basis points and this goes a long way in containing sharp price movements.
I was also asked a question on what I expect of inflation in near future:
My response was that all depended on four key items: the food harvest expected in May/June; the exchange rate, energy costs in view of the anticipated increase in electricity tariffs and the ongoing negotiations for salary increments by the public workers unions. The workers are already responding to the increase in the cost of living and they know inflation has been rising at higher margins. Household incomes have been impacted as we know and this is in part as a result of the economic crisis; and this will give added pressure for higher salary increases across industry.
interesting
Well said soldier,stay blessed
Please we need more and more of your opinions Mr Kanyama. It seems our politicians don’t listen. I propose that the minimum requirement for an MP should be a four year degree in any field, we are being embarased by our expired politicians. It shouldn’t take rocket science to figure out Zambians economic problems
RECORDED OR NOT ZAMBIANS SHOULD LEARN TO SAY THE TRUTH COZ NO ONE IS INTERESTED IN LIES…
This Chinyama Kabamba seems to be a very smart journalist, but why did he dis LT bloggers?
#3, I feel you bro….imagine a parliament full of former monks, mojos, momas, nuns, bungwes, walking sticks…such a parliament would be red hot and really deliver….no doubts!
#5, Chibamba Kanyama dised LT bloggers coz thats what they deserved! what else can one say after looking at the low calibre of postings by a lot of blogers. In exception of VERY FEW, the rest of LT blogers are indeed a bunch of brain washed losers with no direction on principle or virture!
Chibamba kanyama was not selective when he disd LT bloggers, so i dont understand why he is being protected. He said, “all bloggers are……”. Lets not be selective. Coming back to the article, for once i agree with his sentiments. He offers solutions as he sees feasible. Thats what an economist must learn to do!
I think its about time Chibamba Kanyama stopped lecturing about things he hardly understands. There are four main types of inflation: demand-pull or excess demand
inflation; cost-push inflation; pricing power inflation (administered price inflation) and sectoral inflation. Now, if indeed he wants the likes of me to listen to what he has to say, he should describe the nature of the inflationary exuberance characterising the Zambian economy in a context, i.e. one of above four before drawing a conclusion on instruments the government need to engage to cure it, fiscal or monetary. Otherwise his analysis is a lot of bollcks!
i still cant figure out what incessed some people to throw a lot of filth and all sorts of unprintables at chibamba kanyama.i have shuffled between his earlier posting and the clarifications he is making on the latest posting stii i cant find any line where he is passing any degrading remarks against LT bloggers or maybe am missing some lines.can somebody please point out to me or was it on radio TV.
Ladies and gentlemen, I honestly think a lot of people on this site do not have an idea about economics whence their mesmer by Chibamba’s basic economics knowledge, I mean, its the case of a one eyed man being a king among “abena PK Chishala”.
#9 Learn to appreciate! For an article that is meant to public consumption, he can not go into all those nitty grities…..If you have just finished an evening course in economics, give us a break. Chibamba is smarter than you think and he is getting successful everyday while the likes of you are holed up in neverland with only LT access to be proud of!
what did Chabamba Kanyama say about LT bloggers,some one please help me?
Ok this is much better and sounds like it is coming from an economist. Thanks Mr Kanyama for clarifying what you actually said. Am one of those that attacked you on the earlier post and in the light of the above information, I apologize, and please accept my apology. LT/ZNBC/ZANIS/ and all our daily papers really need to improve on your reporting. The world is flat and what is reported reverberates across the world through google in minutes and it is embarrassing on the quality of some post that is why some of us as Zambians take it upon ourselves to correct things in the comments section to save our country face.
Another addition to your article , I think promoting competition is another effective way of taming inflation. Remove monopolies like DSTV , ZAMTEL, ZESCO and others
#12 Engine Bbuloko, thanks it can not be said any better !!!!!
#11 Shaka you are funny.Yes after the brain drain the likes of Chibamba Kanyama have been left as the economic experts in Zambia. After dissing LT bloggers as time wasters how come he is now writing articles on LT? I think he owes us an apology. Great men are known by how they treat the small man.
#12 Ba Y-man yashani? slow down bamudala. Ok still mofye namukwata point. Tiyeni tukeminine 2011 so that monks,momaz,mjos, bungwes and the infamouos walkies can once again reunite for a good cause- to save our beloved Zeed from collapse.
#12 Engine Bbuloko I totally agree with u just can’t go on and start saying am now talking about ‘Built-In Inflation- “costs in view of the anticipated increase in electricity tariffs and the ongoing negotiations for salary increments by the public workers unions.” The man said the right words at the right time for the right audience,had it been for 4th year unza students then maybe those details could have been appreciated. I think the man knows what hei is talking about give kudos’ to were they are due please.
#15 Wiseman-reborn, thanks bro for your appreciation of my thoughts at #12. We must move from by arm-chair critics to action oriented people. If one has a better solution or explanation to something, they should just put it across and not hunting down those who have put up theirs. Some students abroad on funny scholarsips doing funny courses are indeed funny!
#17, #18….you are the people that can bring change…. I wish you the best in what you are doing. May God in His mercy give you an oppotunity to contribute to Zambezi Land one of these days. He who can see sense on little things can also see sense on bigger things. Am out for now….gat get bussy on some work….enjoy your day all the bloggers!
This Chibamba fimo fimo also has his own website. Ati chibambakanyama dot colom.
A young talented Zambian capable of making sound contributions to the status of our economy. Keep it up and avoid that hand shakes with the filthy hand of corruption.
That was a good analysis Chibamba. Inflation has been worsened mainly by kwacha depreciation and therefore to tell us that inflation has reduced when kwacha continues to depreciate is suspicious. I do not know to what extent air fares contribute to inflation in Zambia, but it could be significant given the fact that zambia is a trading nation. Your analysis was objective any how. Tchüss
#13 Ghost Dog, I heard from sources right here that he called LT bloggers “time wasters” on ZNBC or radio a few weeks ago.
If what Nine Chale says is true then I withdraw my Statement at Numbala 23 with immediate effect.
This is a better view of an economist worth his salt. Unlike that article on inflation by Chibamba last week that seemed to be insulting our intelligence
No. 8, Ba Moze, Mulishani mudala. Hope you had a nice weekend. What did Chibamba Kanyama say about LT Bloggers??? Bushe aliponta ??
#26 Ghost, am ok mudala. He said, ” I dont really understand how people can waste their precious time posting comments iof no value whatsoever. Those are time wasters”. Its interesting to see an article of his pa LT. I suppose he appreciates the audience…and the comments after all.
SHAKA ZULU WA SENZANGAKONA, keep the little knowledge you have on economics to yourself please.CHIBAMBA KANYAMA is a tested economist both locally and internationally and he is recognised.i still remember vividly during the last COMMONWEALTH HEADS OF STATE SUMMIT Held IN KAMPALA UGANDA he was one of the key note speakers on economics and he was highly acknoledged.and this is no mean achievement and in zambia all these multinational institutions queue up for him just to have him present a paper to their foras or as a motivation speaker.unless out of malice one want to dispute this fact.now imwe ba SHAKA tell us obout yourself.
If you are appreciated when you speak on behalf of your family on funerals then let others also be appreciated where they speak to another audience.
#23 Nine Chale,hmmm, if thats what he calls us then why does he seek to explain to us about the mistakes reported in the last article?,he must be the biggest time waster then.
He said that he was touched and disappointed with people who spend/waste time blogging on LT. He said time spent on LT can be used productively.He said this on a Live Muvi TV programme. Anyway something in that line
#28 Akapondo. yaba, Ati shani? If Shaka is appreciated for speaking at funerals! Wansekesha iwe mudala!! Yangu!!!
Zambians in the diaspora…….kulibonesa.learn to be humble,folks……….
BA Economics Bsc Water Engineering
MBA Bsc Civil Engineering
breweries fimo fimo Msc Structural Engineering
????/ LT articles Phd Bridge Engineering
updating website
Cervenka Consulting Engineers
Now Mr chibamba who is wasting time btn me and you?
Akapondo my lungs my tears! Ati shaka speaking ku ma family gatherings n funeral mudala wanjipaya sport on!
AKAPONDO: I hope you can say same about Dambisa Moyo
People, may i please request that we learn to accept each others views? Khani yama funeral awe!
Why should the learned Mr. Chibamba Kanyama waste his time to post an article for time wasters on LT.
Sorry boss ba NJINJA YOBWELEKA. I missed your point what could i-have said about dambiso moyo?
interesting …..let me read b4 i comment….Akapondo,Ba Moze,Ghost Dog,the huslter how are you mwebantu?
Ba Far-Q mwela onse. Nakalebalika.
No. 27 – Ba Moze, It makes for very sad reading to hear him say that. The problem is he thinks economically for everything in life. He must understand that this website is not a formal thing and it encourages people to socialise and interact. I have read a lot of intelligent and well informed comments on this website. The jokes are unbeleivable it just brightens up my day.Let him go and be economic no mukashi wakwe, and then bakamwafwa .
Ghost, wansekesha! Its a question of all work and no play mudala. He can be.
Ba far-Q muli shani naimwe? Nice to ‘hear’ from you.
Chibamba Kanyama would do well to apologize to LT bloggers in an open letter asap. We’re waiting Mr. Kanyanya, oh sorry Kanyama.
Leave Mr Chibamba alone
Slight correction. The two broad sides to inflation are NOT fiscal and monetary but rather cost-push (supply side) and demand-pull (demand side). What Chibamba has referred to as being a fiscal influence is actually structural inflation which is a supply side issue. Fiscal and Monetary sources are the demand side.
Because Chibamba is not really an economist I respectfully applaud him for revisiting his earlier statements and making clarifications. I also appreciate his comment that the exchange rate (a monetary issue) has a strong effect on inflation. Though there remains a few misleading issues in the clarification, such as the use of interest rates in monetary policy in Zambia, I give him a B+.
Uku bwatabwata ba Chibamba, as if you are the only economist in Zed. Abakali tabalanda…wamona manje…..Hi Bloggers !
Ba maureen, shani!!
#43 Is is a genuine typographical error Nine Chale !
Ba Moze @shani ala I was very busy
Mr Kabamba ka animal demoralised bloggers for no apparent reason. Now he is apologising for being a time waster himself..
” It is true that many people, including myself will find it difficult to believe the inflation rate has indeed dropped in Zambia when we are experiencing the opposite. The CSO highlighted the reduction in air travel fares as having positively affected the inflation basket. There are not many Zambians who travel, and besides the airline industry has experienced a drop in travel. ”
The real problem is that there two (or more) economies. One for the westernized elite, the other for the 70% who live on $1,- per day. The economy of the millions of marketeers and subsistence farmers, which is facilitated by 30% or higher lending rate set by western banks, instead of the BoZ. And by the government’s absence of a comprehensive development plan for the SME sector and agriculture.
Instead, the government is determined not to lead, and leave things to the Utopian market forces of Neoliberal economic theory. The same economic theory (deregulation, privatisation and ‘free trade’ for corporations), that is causing the world’s economy to collapse. Deregulation of the banks led to hundreds of trillions of dollars of toxic assets – many times global GDP.
” Household incomes have been impacted as we know and this is in part as a result of the economic crisis; and this will give added pressure for higher salary increases across industry. ”
I don’t follow. Joblosses lead to lower incomes for everyone. The persons who lose their jobs, and the entire workforce which now has to compete with more unemployed for fewer jobs. How is this going to lead to pressure for higher salary increases?
Mr. Kanyama sounds like a supply side (free market) economist, forever worried about ‘wage inflation’.
In fact it are higher wages that will stimulate demand for goods and services, to the degree that this is possible in a barely developed economy.
With a proper industrial policy, it would actually stimulate local production, rather than…
With a proper industrial policy, it would actually stimulate local production, rather than imporation of consumer goods.
Sorry folks i saw this rather late but i still want to make a contribution.
Firstly with all due respect to big brother Chibamba i would like from the outset to say that he is not an economics expert as the local media call him. He is by trainging at undergraduate level and career history a Journalist. He minored in economics at UNZA and therefore did four/five courses that is all. At postgraduate he never did a single economics course. In terms of jobs from ZNBC, to ZAMCOM , ZSIC and now ZB he has worked as a journalist/PR person. So where does the economics expertise come from?
I have done economics at both undergraduate and post graduate and you will agree with me that economics at undergraduate are very basic and sometimes very misleading. Comments on this misleading article later.
To be an economist you must do among others courses advanced microeconomics, advanced macroeconomics and econometrics. After this you should be grounded in economic theory and then be able to empirically test the theories using econometric applications
Let me start by commenting on the BOZ interventions in the foreign exchange market. He alleges that intervention has protected the kwacha by 2 basis points. What that means beats me. May be he wanted to say that the kwacha has appreciated by 2 % as a result of that intervention. If my interpretation is right did our brother conduct a study to arrive at this conclusion? The efficacy of central bank intervention on the exchange rate has remained a very controverisial issue and in Zambia only Dr. Simatele has done a study on the matter.
45, I salute you. I honestly think it is a sheer waste of time to engage some bloggers on this site in an intellectual discussion because they are clearly incapable of doing so. For a lot living in a country wriddled with economic woes for decades, one would expect they would appreciate economics least at a basic level. See, prolonged economic malaise has wraught them death and all arguments for some of them centres around “funerals”, a “nullity” to the subject matter but indeed an everyday occurence in their lives. I cry for mother Zambia.
If indeed people wanted to know who the top economists are in this country, they dont need to look far, Dambisa Moyo. You can buy her latest creations, “Dead Aid” from Amazon. Her other works of note include “The World Bank Annual Development Report – 1993 to September 1995” which she co-authored. Africa is the least developed continent by far and any fan of an economist worth his salt cannot blow tantrums about being invited to address dinosaurs called African presidents about economics. With speakers and advisors like Chibamba Kanyama, who needs economic enemies?
chibamba kanyama is not in competition with any one.the guy carries out himself in just a normal way.he is inteligent and creative.his article talking business in the post is widely read and has an impact on readers.verify with the post if you are a sceptic.they are on bwinjimfumu Rd.CHIBAMBA KANYAMA doesn’t need to be like DAMBISO MOYO.DAMBISO is in her own class and she has excelled she’s awesome. but people like BONO will tell you that she is a flop and her book DEAD AID is misleading
So it’s a vicious world.so weather chibamba started as a broadcaster is here nor there.it just goes to show that with determination you can reach heights.the guy has made it.the problem is that some of you guys are just good at propounding your economics at smugglers ohagans and the times. Chibamba…
CHIBAMBA KANYAMA my bro’.you owe no one an apology.what you said was dead right.almost every blogger on LT is in the diaspora very few of us are back home breathing polluted air.they dont make any positive contributions apart from telling us how they are living in europe.making us belive that all is well.shame.decent life is in africa if you dont know.we dont need a morgage to build a house or buy a car.i wont go to a bar and drink like a wizard i’ll afford to buy a beer for my friend.some of you are there illegaly please come back from the dispora come back home it is promising back here.infact now with the economic crunch the white man no longer want you blacks with these job loses they need every job even those that they reserved for you blacks like dish washing,digging…
Akapondo, for your own information, I run my own company and currently emply 100 people, including 20 so called white men so there in no need to smear me with stinking filth such as “dish washing,digging etc”. Through bankrupt snobs like you, ennured to stoogery and perpetual bootlicking, intellectual snobbery is alive and well and living in Zambia today. It vexes me deeply why you want to bring in “beer drinking, wizard etc” to this argument? It’s like a fool who brings a bummerang to a gun fight crying foul once nailed by a 45mm! Simply death by misadventure. My advice is you and Kanyama should know your league! Mwacepa!
yes i was saying my fellow blacks come back home because even the jobs that a white man reserved you like washing dishe,digging trenches,refuse collection,shoe cleaning he’ll no longer give them to you because now he need them.so very soon even there xenophobia is coming.so the earlier you make up your mind the better for you.
Kaya mwe!!!!!
Mr K, I was about to say exactly what you said. Thank for breaking it down. And Chibamba, shut up coz ur lil explanation dont mean nothing to us…we know better. Let those with no Economics knowledge appreciate your motivation speeches
#63, You are playing with the game of burning bridges, TOTALLY UNNECCESARY, You never know who may help you and you have no right to start dissing a brother like Shaka Zulu when you dont even know him. How you know if u may need his help some day? How many zambians at home have proper houses? The only thing we miss about home is food and well FYI, we still have our nice jobs, thanks for your concern! Your comments have gotten off the topic and your Chibamba need not bother about correcting his comments coz we dont care… Can you perhaps tell him when you pass by Bwinjimfumu Rd ?
miss daisy,
I have ceased fire.where were you when this topic was at it’s peak.no one envies you with whatever circus you doing where ever you are.after all we know of tuma ladies out there who are married to some old worn out men just to stay in europe.i have had enough of this crap of you underweights talking ill of innocent chibamba kanyama but if you want to drag me back in the gym and spar iam game.
# Too bad you have seazed the fire before saying anything sensible!
sp “ceased”
SPINISTER DAISY
Yeah! Some times i puke trash,and if you insist i’ll throw it at you that you wont even have the appertite to service the aspiring candidate tonight.
Discuss issues people, lets do away with character assisination,
i need your knowledge about what i dont know i will impact little that i know that can be of help to some one plse.
lets find solution to our ailling nation , with such brains i think we will come out strong.
Thank very much