CURRENT RISING COST OF LIVING AND BUDGET EXPECTATIONS
The Millers Association of Zambia this week announced the intention to increase maize prices for 25Kg bags for both breakfast meal and roller meal from an average of K75.00 to between K80.00 to K90.00 and from K53.00 to between K60.00 and K70.00.
The JCTR also noted that in the same period ZESCO issued a statement on their application to Energy Regulation Board (ERB) to allow it to more than double the cost of electricity (from K0.31/kilowatt hour to K0.88/kilowatt hour) for all customers except mining firms effective 1st November 2015. This follows President E. C. Lungu’s speech as he opened Parliament on 18th September 2015, where he indeed mentioned that there would be an increase in electricity tariffs by approximately 84%.
It is with this background and that of the monthly JCTR Basics Needs Basket research findings of September that the JCTR raises concern over what is being done to ensure that ordinary Zambians are able to cope with these raising prices and looming increases of various costs.
The JCTR Basic Needs Basket (BNB) for the month of September for an average family of five living in Lusaka recorded a significant increase in the cost of both food and essential non-food items from K1024.91 to K1, 072.92 (K48.01 increase) and from K2, 806.33 to K2884.54 (K78.21 increase) respectively.
It was noted that of the food items 10 out of 15 food items monitored on a monthly basis increased in price such as mealie-meal, beans, beef, green vegetables, bread, sugar etc. while of the essential non-food items 4 out of the 7 items increased i.e. charcoal, Bathing soap and washing soap and petroleum jelly.
Increases thus in both the staple food mealie meal and that of electricity serves only to worsen the already critical livelihoods of the poor living in Zambia. Not to mention that the cost of doing business in almost all sectors has gone up as the try to cope with the current load shedding situation by buying generators and using fuel whose prices rose in the month of July.
It even more saddening for households that depend on the mining sector in our Copperbelt province that have even a greater challenge to overcome with job losses in the midst of raising cost of living.
The JCTR thus hopes that in the announcing of the 2016 Budget for Zambia in Parliament the rising cost of living and the various economic shocks that Zambia has faced in the third quarter of 2015 will be taken into account and solutions addressed. The Centre hopes to see in next year’s budget priority will be placed on the much talked about diversification of the Zambian economy through sustainable projects.
It is noted that government has placed an emphasis on the creation of meaningful and gainful employment and the Centre is looking to a 2016 budget that creates an environment that will ensure private sector involvement in production and manufacturing and thereby the creation of jobs and viable incomes that contribute to the Gross Domestic Product (GDP).
This can be done through reducing the cost of doing business for women and youths to enable them participate in adding value to local goods through manufacturing which will broaden the tax base and reduce poverty levels among the marginalized.
It would thus add value to the government’s plan to implement various industrialization and empowerment schemes with various ministries. It is also hoped that government will take more stringent measures to ensure lower levels of default and increase loan repayments actualized as these would help these empowerment projects be self-sustainable and reduce wastage of funds.
Looking towards Agriculture, it is hoped that the results of this year’s pilot E-Voucher system will be used to develop a comprehensive system that will be rolled out to ensure inclusivity and fair distribution in the FISP Programme for efficiency in view of the increase of beneficiaries. In this key sector that government hopes to diversify to, it will be necessary to see that in the 2016 budget funds are allocated in the ministry of agriculture towards research and development, alternatives to synthetic chemical fertilizer that is expensive, embracing more sustainable agricultural systems, improving value addition through manufacturing and ensuring a more transparent, efficient and private sector led marketing system.
JCTR hopes to see a broadened tax base to include the informal sector as the formal sector has been carrying the tax burden for all sectors. To ensure easy compliance and efficiency, revenue collection of the informal sector could be done through the district councils and an internal system of accountability towards councils in the overall administration process e.g. the current tax on rental income.
This would add value to their work in the collection of other taxes such as parking tax and toll gates if government provides an automated system the collects information in real time and uses local banks in the areas on behalf of the treasury. The Centre also hopes to see a strengthening and increased allocation to ZRA to enable them to adequately collect more fund through increasing staff and investing in staff training.
To improve load shedding the Centre hopes that Government will set aside funds for effective completion of projects that have been proposed to improver power generation e.g. installation of solar panels and expansion of currently existing hydro-power stations. It is hoped that this will not be another case where years from now we look back.
It is hoped that with these relevant changes, there will not only be an improvement on the performance of the economy but also improve the lives of the people. JCTR would like the budget to make relevant adjustments that will focus on the marginalized and reduce the gap between the rich and the poor.