The PF has finally woken up to the fact that the price of essentials such as mealie meal have risen beyond the reach of many, weeks and even months after everybody else. But as usual they are using the wrong methods to address the rising cost of living.
After a short export ban last week, their latest misdirected measure that comes late in the day is reportedly to introduce a price control through a Government-issued Statutory Instrument. In the UPND we want to see lower prices not through statutory instruments, but through proper economic planning. What will the PF issue an SI for next? Bread? Fritters that are now K1.50 from 50 ngwee three short months ago?
We all know that price controls have been used in the past and that they do not work in such cases. In fact they often make supply problems much worse.
President Lungu wonders why the prices have risen so much that in some places we have seen prices as high as K150 when 5 years ago that same bag was K35. The reasons behind the price increase are not a mystery. Firstly, the price of farming inputs is very high, farmers are now paying over K300 per 50kg of fertiliser that they bought for K150 a few years ago. Secondly, load shedding is taking a toll on business. Companies are running generators, which add to the cost of doing business. Thirdly, supplies have been lowered due to high levels of export at a time of reduced yields, and basic economics tells us that when supply is reduced then prices increase.
President Lungu and his Government were warned from several quarters on this upcoming problem but chose not to take any action to prevent it from escalating. The UPND wants to see lower mealie meal prices but they can only be lowered sustainably through support for the farmer, reduced price of farming inputs, resolution of power issues and investment in the agriculture sector, as part of a broader plan for economic growth.
Hakainde Hichilema
UPND President
Anything that benefits Zambians is not good for HH. The SI is meant to bring sanity to the market. Millers are getting subsidised maize from FRA but are charging more so how else can you control this.When sanity prevails then the SI can be removed. So HH would rather zambians pay more until next harvest when the price can be reduced now.
How can you even say that and live with yourself? Zambia has about 40% water resource and you want to be depending on rain!!! the region has declared a food shortage and you have the capacity to produce for the entire region..what do you do? You instead fold your hands and miss out on big big bucks that you can raise from aggressive agro business. Zambia has a natural market season all year round. Dont hate HH just because he is HH try and see reason in what he is saying ..and here he has said alot of sense. Food control in 2016 ? You must be joking.
Price controls in a free liberalized market economy??? My foot
Mr Manda,
Don’t embarrass yourself. Price controls work in countries that have detector-ship tendencies like Venezuela. Supply this maize in abundance you will see prices drop drastically. Zambia just over exported the commodity and demand is high as result.
You have started. So you mean you don’t know what happens when you introduce price controls? When SI 133 was introduced you were there trying to demonize HH but when the dollar skyrocketed who suffered?
Agreed. this is the same guy who has been saying the price MM is too high. The current price is a true reflection of the market. But we also know there is distortion because of smuggling. Price control is a short term solution but has to be implemented to take pressure off the people. In the long run only increased productivity will address this issue. And improving infrastructure like roads will go a long way in improving transportation of produce from previously inaccessible land.
So you want HH not to speak out when PF is going the wrong way? Do you know what his job is as an opposition leader? Do you really want an SI for sugar, salt etc? Mark my words: very soon EL maybe before even before this SI is signed, he will reverse it. Lungu nafuti, nafuti, yes poverty nafuti, nafuti.
Actually EL knows that May is around the Connor and Zambia will be flooded with cheap maize and so Millie meal will be available and cheap relatively. He will all the same sign this Millie meal SI in order to deceive the masses that it is the SI that has reduced Millie meal and therefore he is a caring president.
HH is a lunatic period! When mealie went up cos of market forces he blamed EL. When government intervenes to protect the poor he still blames EL. Yes price controls are not good for the economy but HH too is preaching about price controls by subsidising the cost of maize inputs? Government can either subsidise the price of maize inputs such as fertilizer or the price of maize it sells to millers to ensure consumers get cheaper mealie meal. In both cases Government suffer losses. HH is fake!
@ Shebele, I am not a great fan of any politician, but the reality is that someone is in charge of the levers of economic management and it’s not HH. This Government should accept responsibility for the failings it has presided over. Inflation is north of 22% from 6.9% not too long ago. ABC economics for you. All these issues may not be entirely controllable, but at the end of the day citizens expect the Government of the day to stay in charge. You can not claim that is happening right now.
Even in your personal life you can cot always deflect blame. You have to charge of your life and your fortunes. It’s that simple.
Quote:
“…The reasons behind the price increase are not a mystery. Firstly, the price of farming inputs is very high; farmers are now paying over K300 per 50kg of fertilizer that they bought for K150 a few years ago…”
Well, this may be true. But, first of all, has HH accounted for inflation in the 5 years that he is referring to? Secondly, the Govt subsidizes inputs through FISP (I think that’s the program), so most farmers do NOT really shoulder the true cost of farming inputs. Thirdly, it is NOT farmers who are benefiting from the PRICE GOUGING going on in the meali meal market. It is middlemen (like GBM), people who never spent even a ngwee on farming inputs, that are raking in unjustifiable profits through exploitative pricing of meali meal, and this after procuring cheap inputs…
continue…
inputs (maize) from the FRA. Inputs which people like HH (and every hard working poor Zambian) paid for through taxes to the Govt. If this does not trouble HH, then what keeps him up at night as a prospective national leader? We all know HH is a capitalist, but even capitalism has a heart!
Quote:
“…Thirdly, supplies have been lowered due to high levels of export at a time of reduced yields, and basic economics tells us that when supply is reduced then prices increase…”
“…After a short export ban last week, their latest misdirected measure that comes late in the day is reportedly to introduce a price control through a Government-issued Statutory Instrument…”
Aren’t these two statements sort of contradicting each other? First you say the export ban was a misdirection, and then you turn around and say high levels of exports have led to low supplies of maize, so which is which? Are you in support of export ban because of low supplies of maize, or export ban was a misdirection?
@Dombwa: google “PRICE GOUGING and learn!”
Sometimes we Zambians are OUR OWN BEST ENEMIES. Anyway, assuming that folks like you and HH have access to computers, all you could do is simply look up these issues on the Internet and learn how other Govts in different parts of the world deal with such similar issues before you rush to condemning your own Govt—the Internet is a beautiful invention!
In my opinion what is happening with the price of meali meal is nothing but a pure case of PRICE GOUGING. Price gouging is defined as follows:
@Dombwa: continue…
1) Price gouging is a pejorative term referring to when a seller spikes the prices of goods, services or commodities to a level much higher than is considered reasonable or fair, and is considered exploitative, potentially to an unethical extent.
OR
2) The practice of raising prices on certain types of goods and services to an unfair level, especially during a state of emergency.
The most common items used in price gouging include food, water, gasoline, and medications. Services such as plumbing repair, heating repair, roofing repair, and other services desperately needed by many in a state of emergency, are also subject to price gouging. Price gouging is against the law.
@Dombwe: continue…
Now, I think it is important to understand the environment in which these prices have spiked.
1) Is the situation as a result of a normal or natural phenomenon of supply and demand? The answer is equivocally NO—not when people are hoarding the commodity to cause artificial shortages in order to drive up the price.
2) Or is the situation simply brought about by humans (millers, greedy traders, and scrupulous exporters) manipulating the market during a natural disaster/emergence (draught)? The answer is YES.
By HH’s own statement: “… load shedding is taking a toll on business…” Yet he forgets to mention that load shedding is a product of low water levels in our dams caused by almost 4 years of drought, an emergence/disaster no Govt on earth can control.
@Dombwa: continue…
So, given the definition of PRICE GOUGING, I feel Govt has the right, even an obligation, to step in and STOP the exploitation of consumers (who are mostly poor Zambians.) And price gouging is almost always illegal everywhere you go in the world. Yes, even here in the USA there are LAWS (price controls) in place to guard against such exploitative behavior by businesses! So what the Zambian Govt is contemplating doing in order to bring SANITY and FAIRNESS to the prices of one of our MOST ESSENTIAL FOODS (staple food) in our Country is perfectly legal, prudent, acceptable, normal and essential!
broaden your thinking a bit higher to grasp what HH is saying. Business men are also Zambians. They have reasons for perging the price high. Than is what the Government needs to understand. Not forcing them to reduce.
He gives no solution but always wanting to take advantage of what hates Zambians.
He says supply has reduced hence price go up.
Yes but this not even economics but a fact of simple commerce. Mr hh distinguish between economics and commerce, please. Imports have been reduced to control kwacha rate, hh.
Power problems are not Lungu’s making but lack of planning by UNIP and MMD, hh. PF is addressing this issue,hh.
Come quick August 11, 2016 to nail this dog in the coffin for good
under five is mixing issues that are not related to take advantage of his cadres who don’t think before commenting.
The price of K150 of mm isn’t from farm inputs of costing now at K300. The K300 is for current crop and not from the one you are abusing us. We know you are a shareholder in some milling companies and you are eager to export everything yet your milling companies are getting our subsidized maize. You grow your maize and see if you will manage to gaya any bag. Your mind set is pure of a capitalist, who thinks human beings second to money. Please have some humane feelings.
THIS IS WHAT ALSO CAME INTO MY MIND. HH HATES ANYTHING THAT BENEFITS ZAMBIANS. HE IS EVIL TO THE CORE. THE GRZ CAN’T LET POOR ZAMBIANS STARVE JUST BECAUSE OF PEOPLE LIKE HH HIMSELF. THE FOOD (ECONOMIC) PROBLEMS ZAMBIA IS FACING TODAY ARE THE NEGLIGENT RESULTS OF ALL THE PREVIOUS GOVERNMENTS WHICH PF GOV IS SOLVING TODAY BY MAKING SURE THAT ALL NECESSARY INFRASTRUCTURE ARE PUT IN PLACE INCLUDING INFRASTRUCTURE FOR IRRIGATING FARMS, GOOD ROADS, RAIL LINES, COLLEGES, UNIVERSITIES, MFEZs, FARMING BLOCKS, DECENTRALIZATION, ETC. I HAVE FOUND HH TO BE ONE UUBOSA FYE. THE MAN JUST BARKS.
UNDP have their head so far up their a.ss that they are validating their own shi.t!
these are the characteristics of crooked business thieves, this moron who doesn,t even think of his former primary school.These are the people once in power will be insulting the electorates if they complain”i did not ask you to vote for me, and I came into while rich and what getting is the money I spend on airtime per day!!”typical of i moron nkonomisits!!
Price controls are never a good option and usually have ramifications.
HH the defender…Anytthing that PF does HH defends. Please tell us your plan so we can vote for you. Otherwise you will be reduced to the level of your opponents if you are not telling us your plan, Defender HH.
But he is just from giving a solution. Prices dont just skyrocket. the cost of production needs to be addressed.
to make it simple for you. promote domestic power supply measures like solar power initiative for homes at reduced price so that most hydro power is channeled to industries for production. By so doing, you are cutting the power factor cost of production. Industries wont need to use generators to produce. Pump more money in NCZ so that we can produce on large scale and sell fertilizers to farmers at cheap price. for your own information, Zambia market is heavily populated with imported fertilizer which is dependent on exchange rate. By producing locally on large scale, a local cheap product will be on market. all these elements will translate to reduced Millie meal prices. Its…
Yes HH. YOUR PLAN PLEASE! don’tcare has said it all!
Cadres, your mentality is a 10th wander of this world, you were the same ones complaining about going back to UNIP days, an opposition leader & affected stakeholders say something & instead you come out calling them names.
I have noticed that most of these cadres on this site are either abroad or directly benefiting from the nimwits in the PF government.
Try to oppose beyond the larger population which will be affected by the government’s decisions
HH nankwe anyanya mwee. Some things teti fyakupitako? He is literally quite on the rituall killings and yet the most talkative when it comes to the dollar and mealie meal.
HH is not quiet on ritual killings. Its just that you dont read. If anything is to be hidden from a black man, let it be in writing.
Dont just browse one site. Check all to get balanced information my dear. At least the hunger in your tummy and mine is not arguing that things have gone wrong and need to be addressed systematically. The cost of living is the one telling it all. I voted for PF on reasons of their motto: lower taxes, more jobs and more money in our pockets. Which of these do you have?? Stop conforting yourself. Its real, we need to start afresh.
May i please be assisted with which media your HH condemned the killings? A link will be best. i thank you.
He is a beneficially of both ritual killings and the killing of the dollar
The only thing HH says, we’ll do better than PF. But the problem I have is, why doesn’t he say wat should be done so that pipo can see sense in him. The only thing he says is, we re going to end loadsheding, we going to reduce the coast of living, we re going to do abcd. But the bigger question is how? I know, the response would be; pf will steal my ideas and implement them. Then I get to wonder, is hh’s interest ascending to presidency or helping Zambians? How on earth can I vote for someone who claims he has the solutions while subjecting zambians to suffer for the past 10yrs he has bin on opposition only until he is voted in? I think that’s being childish, no wonder sata called him under 5. I would rather stick with EL who I know is trying so hard to help the poor zambians than…
You make no sense!! How can HH subject people to suffer while he is in opposition ?????????? He can only get people out of proverty once he is in power. The current and past leaderships have not listened to any of his advice so it is not his fault that they keep on stealing and lying and subjecting people to poverty !!!!!!!!!!!!!!!!!!!!!!!!!!!!!
We don’t need someone to help us. We need a leader. He says Zesco needs professionals to end loadshedding. Solution. We need to up agriculture production. Solution. We need to export value added goods to create jobs & lower exchange rate. Solution.
Problem for most PF followers is that to them solutions is equal to spoon feeding them.
#CHAGWAMUSTFALL!
Price controls never work. They just breed corruption, black markets and lead to more shortages as the producers are forced to sell below production costs (at a loss). So they abandon production leading to even more severe shortages. This is what caused KK’s downfall.
In a ”pure” competitive commodity market, price controls indeed breed inefficiency. (Corruption, black markets, shortages etc.) However in the case on Imperfect markets with Govt. as the major player thru FISP and Buyer (Maize) of last resort thru FRA it has an interest to protect – sell mealie meal at affordable prices. By Govt. subsidizing maize production thru FISP it must ensure millers (value addition partners) do not frustrate Govt. good intentions, by overcharging the price of mealie meal milled from the subsidized maize. Hence jeopardizing the system. The IS is intended to address this greedy behavior a ‘cartel’ millers.
soon we will start receiving coupons
..some comments from certain bloggers make a sad reading indeed….it tells what a people we are….’lazy when it comes to reading….when we read, we rush thru the article without comprehending and analysing….some are even asking for HIS plan….meaning they have just read a title and straight rushed for a comment without reading the article….when he says ..high cost of farming inputs what is he saying…??…when he says exporting maize without giving it a thought…if millers cost of producing a 25kg bag is K60 how would you ask the miller to sell it at K45..??…when price of cooking oil goes up you seek for an SI to reduce price..??…laughable indeed…
Why bring in the price of cooking oil? Are raw materials for cooking sourced from govt? We are talking about m/meal because the raw material which is maize is sourced from govt(FRA) and is subsidised so govt has the right to regulate the price.The problem with UPND cadres is that they tend to bring unneccessary arguments over straight forward issues, some bloggers above have analysed the issue very well but you are bringing issues of cooking oil which irrelevant to the topic. Very sad indeed…
dont expect the prices of 1970 to be the same today, unless you are an inkonomisit.The moron has never said anything positive about PF,the moron is a total disaster
Is fuel price not controlled? So why cant mealie meal be controlled if prices are getting out of hand. I dont see any ramifications as far as fuel is concerned. An SI is just temporal until we zambians wise up. Im surprised at how pipo would want zambians to suffer high prices in the name of investors
If the price of maize and maize products are regulated, who is to benefit out of it? Is it not the Zambians so anything that is beneficial to the Zambians its bad to Akainde? Is he normal??
How does he subject pipo to poverty wen he is opposition? He claims he has solutions, but he given any? He says he’ll end loadsheding, has he said how? He says he create 1000000 jobs, has he said how? Am sure u have no answers as well. If he has solutions, let him tell to end poverty, if he doesn’t, let him stop yapping. And am sure he doesn’t have any. After all he doesn’t have any experience in governance
THIS MAN IS EXTREMELY BITTER. EVERY TIME THE GOVT TRIES TO INTERVENE TO BETTER PEOPLES LIVES HE BITTERLY SPEAKS AGAINST. DO YOU HAVE THE HEART FOR ZAMBIANS.
BESIDES WHY DO YOU WANT TO MISLEAD THE MASSES. WE ALL KNOW THAT THE PRICE CONTROL IS ONLY DIRECTED ON MAIZE THE SAME GOVT IS SUPPLYING AT SUBSIDIZED COST. IS THE GOVT SUBSIDIZING THE PRICE FOR FLOUR/YEAST FOR YOU TO GIVE FALSE EXAMPLES THAT NEXT WILL BE BREAD…
YOU ARE A PURE SADIST BUT WAILASHA.
ECL/PF ALL THE WAY
You dimwit, price controls lead to lower supply. There will also be shortages because demand will exceed supply. This leads to waiting lists and the emergence of black markets as people try to overcome the shortage of the good and pay well above market price. Stop being a silly cadre
Continue ruling from outside until retirement in august.
so we have certified illiterates who cant even read and see the solutions HH is offering in his statement.
In a ”pure” competitive commodity market, price controls has the propensity to ignite inefficiencies. marked by Corruption, black markets, shortages etc. However in the case on Imperfect markets with Govt. as the major player thru FISP and Buyer (Maize) of last resort thru FRA it has an interest to protect – sell mealie meal at affordable prices. By Govt. subsidizing maize production thru FISP it must ensure millers (value addition partners) do not frustrate Govt. good intentions, by overcharging the price of mealie meal milled from the subsidized maize. The IS is intended to address this greedy behavior a ‘cartel’ millers. Govt has no interests in bread and Fritters Market par say. it does not subsides the flour market. HH get you facts right this is simple economics!
HH is spot on! Economics 101 tells u that when supply goes down and the demand remains the same then price will rise. Its called Supply and Demand rule. ECL govt exported most of the maize strategic stocks thru FRA and cannot increase supply of maize to millers becoz the stocks were depleted. The PF govt made a mistake of exporting maize in search of foreign currency and have no money to import maize. They misplanned and misjudged maize supply. Price controls never work becoz they produce a black market where mealie meal will be sold at high prices than controlled prices. These are the facts of life.
The Supreme Leader HH of the UPND is an Economist and should know better that the Classical Theories he wants to rely upon do not always work and hence were challenged by the Keynes Theories in 1948, that in fact sometimes its necessary for Government to intervene in the Economy at some point to normalise some distortions thru’ legislation, Subsides and other complex issues which can be implemented in trying to arrest a situation in the short term…HH should sometimes take time to learn how the Economy of a country runs and appreciate that its a constant balancing act which should be done in perpetuity, its really different with running companies…
People are queuing for mealie meal even when the price is high. What does that tell you? DEMAND has exceeded SUPPLY! Now how will price controls increase SUPPLY in order to reach equilibrium? No way! In fact demand will even go higher bcoz of artificial low price, leading to more severe shortages. Simple basic O level economics. It’s not rocket science!
Though Mr. H.H. has a point, it should not be ignored that ours is an economy running on an imperfect system. There are so many factors defiling the system such that perfect remedies will hardly give expected results.
HARD HEADED INDEED. AWAITING TO BE AWARDED A POLITICAL FAILURE DEGREE.
Price Control can’t work in this era. We are calling for foreign investors every day and we think they will accept that when they are here to make money? The way forward is to eradicate smuggling (not legal export) of maize & its products like mealie-meal, maize bran, etc. One of the reasons why prices of issential goods and services went up is the increase of govt & parastal goods and services by 30% which translated into more than 50%, eg. Road Tax, Fitness, PCRA Fees. Business houses had to follow suit. Unless these are reduced, the business houses can’t do much on it.
Some people here are saying HH is not offering solutions, cant u see that he is advising government to use a better option to solve the problem permanently. Instead of using SI to lower the cost, he is saying lower the farming inputs instead. Others are also saying he is quiet about the killings, havnt u heard him issue statements to calm the current unrest especially that people are looting foreigners shops. Come on people even if u are die hard PF, its not like the opposition is our enemy.
This HH is talking about loadshedding again….SG Chama told you ba UPND the way forward. Do it and it shall be well !
He is not offering any solution at all!
Is this guy ever gonna say any thing appreciative as long as it’s coming from EL?
ITS AT THE LEVEL YOU SET THE PRICE NEAR THE EQUILLIBRIUM IF YOU SET IT FAR BELOW YOU CREATE A PARRALLEL BLACK MARKET THAT SHIFTS ARTIFICIALLY THE PRICE AND OFFLOADS ON THE OTHER MARKETS CAUSING SAME PROBLEMS AND MORE DEAD WEIGHT LOSSES
IT MAY BE EFFECTIVE OR NOT DEPENDING AT WHAT LEVEL OF PRICE YOU HAVE BELOW THE EQUILLIBRIUM MARKET PRICE IF IT CONCIDES WITH REAL THEN SI IS NOT NOTICED BUT OFFEN THE SUPPLY SIDE MUST OUTSTRIPE THE DD TO ENSURE SHORTTERM ACHIEVEMENT BUT NVER SUSTAINABLE IN THE LONG RUN THAT IS WHY ITS AN SI AS MARKETS TEND TO CORRECT THEMSELVES
ITS TEMPORARY MEASURE TO SEE WHERE THE PRICE IS AND MARSHALL ACCORDINGLY
ITS UNDERSTOOD NOT A PERMANENT NATURE AS DEMAND OF MEALIE IS OUTSTRIPED BY SUPPLY AS YOU CAN READ FROM THE RECONCILIATION OF STOCKS IN TERMS OF YEILDS AND CONSUMPTION EVEN BY FAO