Zambia’s inflation slowed to 9.2 percent year-on-year in April from 10.2 percent the previous month as food prices fell, data showed on Thursday, and is seen easing further.
“The decline of one percentage point in the annual inflation rate is attributed to the decline in the cost of some food items,” the Central Statistical Office said in a statement.
Analysts said a good maize harvest could help cool inflation further.
“With the expected good maize harvest, inflation should further decline and Zambia should be able to achieve (sustained) single digit inflation by the end of 2010, if we can manage the harvest well,” Finance Bank country treasurer Miles Sampa said.
“The most serious threat to sustained single-digit inflation is the proposal by (state power utility) Zesco to increase electricity tariffs by 36 percent because that would immediately push up prices.”
The statistics office also said the trade account showed a surplus of 752.9 billion kwacha in March after a 391 billion kwacha surplus in February.
[Reuters]
ati husband and wife leaving shoprite after a shoping spree” shopping yashani naimwe utuma plastic bags tubili… limbi mwalifye amakasa yankoko namatumbo ati shopping:)>- lol
The neoliberal idea behind having single digit inflation at the expense of real economic activity, is that it attracts foreign investment.
The problem is that it also puts a freeze on the economy. This is why neoliberal dogma does not develop economies.
What is needed, is massive government expenditure in productive capital ventures – parastatals, infrastructure in economic sectors like agriculture and manufacturing.
Investment in human capital means universal education and universal healthcare.
The neoliberal ideal has failed. Deregulation of financial markets is in the process of destroying the global economy.
The continuous undermining of demand (buying power of citizens) has thrown us into the Second Great Depression – and for exactly the same reasons the First Great Depression did – neoliberal suppy side economics.
Here is how we can break away from this neoliberal economic model:
1) Tax the mines – take at least $1.2 billion from their revenues every single year
2) Spend at least 50% of national revenues on local councils and demand complete transparancy
3) Use the rest to refund parastatals and farm blocks – infrastructure, silos, marketing and sales support, training
4) Build infrastructure – only 3% of arable land in Zambia is under permanent irrigation. Zambia has massive flood plains that are waiting for irrigation projects to water can be present throughout most or all of the year and 3 harvests per year become possible
This would create hundreds of thousands of jobs – millions in the long term, much more than the 58,000 jobs the mining industry delivers today.
This is the way forward, not the failed globalized neoliberal economic model.
We are tired of the inflation that falls during election times.
And here is another thing. Zambia is not going to develop until it taxes the only economic game in town -the mining industry. And over $1.2 billion a year – every year.
Anything else like borrowing, is just further undermining the Zambian citizen, because it makes the citizen pay for it. When the government borrows, it reduces the value of the Kwacha, which means imported goods become more expensive. The price of fuel and all imported goods goes up – that is how the citizen pays for every single dollar the government borrows.
The fact that the mines are expatriating billions of dollars per year and because of that, the government borrows, explains why the Kwacha has devalued even though copper prices are at historic highs. The rate is K6,000/$, a few year ago it was K4,800/$.
# 1 ninshi ama setting ? Abanenu nabaya ichi pale ku shoprite this is Zed romance,it is ussual to see couples like that pa 30(nabafola) those are the benefits of inflation.Just look at the way madam alelolesha yishimwana.:-?
=)) #1 and #7 mwa nsekesha sana! dueces, bane:)>-
Oh great! thats great news inflation is now to single digit, this calls for massive celebrations in Zambia, At least now prices for mealie meal, kapenta, school fees, etc are definately coming down. RB is a genius how did he manage to bring the almighty Mr inflation down. Just want to apologise to Miss Goody, Senior Citizen and his same s.e.x partner Mr capitalist for the stress i might have caused you lady and gentlemen, indeed RB is a wonder man why should we even bother with kaponyas. VIVA SINGLE DIGIT INFLATION, VIVA RB MR MIRACLE MAN.
MrK, I totally agree with you and thanks for your insights on the “neoliberal system”. It makes a lot of sense reading your comments. I wish the our so-called economic planners could look at things from your angle. We reduce inflation only to attract the “investor” who comes and pays no tax. After his business, he goes away with the money. For me it will never make sense even if inflation was reduced to 1% but the cost of living remains high. I mean inflation reduction must have an effect on the buying power, but this is not possible without increase in production.
I would love to see Zambia’s Phillip curve.:-j:-j:-j:-j:-j:-j:-j:-j:-j:-j:-j:-j:-j:-j:-j:-j:-j:-j:-j:-j:-j:-j:-j
#11 Matworld, you would first assume that those pseudo-economists in Zambia even know the current unemployment rate given the high number of kaponyas and school leavers around roaming the streets. In basic language, a phillips curve indicates the inverse relationship between inflation rate and unemployment rate, which relationship gives different values in the short run and long run.
Well this inflation rate justifies the pay increase of the civil servants of 15%. Inflation is at 9.2% for the month of march so in turn the civil servants earned more if you look at it in inflation terms. This also gives incentives for the financial sector to reduce interest rates. If you have been following the inflation rate this month, the inflation rate has been somewhere in the 9% and 10% zone. This gives incentives for the banking industry to lower interest rates. The banking industry has had uncertainties as to whether inflation can be controlled and this gives them further confidence in the economy.
This is great news. Back to single digit inflation.
Only 3 yrs of RB and we are seeing results already, the next 6 yrs will be friutfull with real development.
To Mr Satas kaponya audience, this is not a natural phenomenon, it is due to hard work with a leader who understands economics, take note, dont just get excited when F.Bwalya speaks.
This all statistics paper and ink inflation stup.idity is so useless to people who are not able to have three meals a day. The prices are high, the cost of living is still unbearable. What development? We need change for better.
12 Keynesian Sku. That is why I said I would love to see our phillip curve because I know some how somewhere the this inflation has decreased at the expense of high Unemployment rate.Unless our economists were using the classical model and no the Keynesian one.Thanks for your contribution.
10 NAPAPA SANA!!!!!!,
” For me it will never make sense even if inflation was reduced to 1% but the cost of living remains high. I mean inflation reduction must have an effect on the buying power, but this is not possible without increase in production. ”
They are reducing inflation because the idea is that low inflation means stability of the local currency, and combined with currency devaluation, it would reduce the cost of labour in Zambia, because foreign corporations will pay Zambian workers in the local currency.
Neoliberal policies are all about maximizing profits for corporations, and they do that by reducing the cost of labour, as well as removing all kinds of restrictions on profits, like taxation, expatriation, etc.
Unionise, lower lending rates for Zambian businesses and consumers, helping subsistence farmers to scale up to small scale commercial farming, having business incubators for local startups, etc. have far greater impact than attracting FDI and getting paid a wage below the cost of living – which is the present model.
Please check out the documenary Life And Debt (through Youtube or my blog maravi.blogspot /com).
It is striking how similar Zambia’s and Jamaica’s experiences have been especially with the ‘Multi-Functional Economic Zones’, called ‘Free Trade Zones’ in Jamaica.
Educate us economists. What is in dispute? Are you saying the method used to arrive at the present inflation figure is wrong or that dependance on statistics to measure the economic trends is an illusion?
19 Josef P,
I am saying that it is pointless to try and reduce inflation to single digits, at the expense of real economic activity. The motive behind getting inflation into single digits is for the benefit of foreign investors – not local entrepreneurs. Because local entrepreneurs still have to buy imported capital goods and fuel – which have become more expensive because of the devaluation of the currency (from 4800/$ a few years ago to 6000/$ today).
What would be far more important to reduce are bank lending rates – which are still well over 20%, making them prohibitive to most legitimate businesses.
But then lending rates are so high because the government is borrowing most of their money, instead of taxing the mines.
Is anyone here on LT able to give an example of any food item in Zambia that has actually reduced in price ?
I am seriously enjoying the discussion. It is interesting how unemployments rates of 6.4% are worrisome in developed countries and yet our leaders don’t seem not to be moved by the fact half our employable population is unemployed. Can someone tell me what strategies our leaders are pursuing to get us out of this economic crisis we are perpetually in?
#21 the only item that moved downward in price is Ubunga kwasila.