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Alba Iulia
Sunday, January 17, 2021

Rising inflation, Increasing Debt and Fuel Shortages Eroding Decent Living Standards

Columns Rising inflation, Increasing Debt and Fuel Shortages Eroding Decent Living Standards

By Chama Bowa-Mundia – Social and Economic Development Manager at JCTR

As the year 2020 is drawing to a close, Zambia has seen a rise in the cumulative number of COVID-19 cases which now stand at 16,770 since the first two cases were recorded in March 2020. The nation has in the past few months witnessed job losses, reduced economic activities and is projected to close the year with an economic growth rate of minus 4.2 per cent. The current context is also characterised by a 16% inflation rate (year on year for the month of October 2020), discussions around Zambia’s increasing debt levels and the call by Government for debt cancellation to free up its fiscal space in view of COVID-19. The country has also in the past few weeks seen a shortage in the supply of fuel in some parts. This notable shortage brings about its own challenges in the production chain crippling business activities as fuel is an essential input in the economy.

The cost of living for a family of five as measured by the JCTR for the month of October 2020 stood at K7,060.29, a decline of K11.08 from the September basket of K7,071.37. The reduction in the basket can be attributed to reductions in some food items. Other fruits moved from K261.19 to K206.65 for 14kg, showing a reduction of K54.54, kapenta reduced by K40.22 moving from K231.62 to K191.40 per kg, banana reduced from K181.66 to K163.57 showing a decline of K18.09, soya pieces reduced by K14.97 moving from K104.85 to K89.88. These reductions where however offset by increases in items such as mealie meal which moved from K164.85 in September to K187.28 showing an increase of K22.43, vegetables increased by K16.23 moving from K413.96 in September to K430.19 in October. From the non-food but essential items, petroleum jelly increased by K39.49 moving from K31.00 in September to K70.49 in October and the price of charcoal increased by K18.67 moving from K273.33 to K292.00.
Undoubtedly, individuals, households and firms are facing significant challenges given the prevailing context. The JCTR therefore calls on the Government to address the key challenges that the nation is facing. For one, the shortage of fuel needs to be urgently addressed given the important role it plays in facilitating various economic activities.

The Centre also continues to put emphasis on the need to guard against increases in macroeconomic variables such as inflation which further erodes the disposable incomes of households thereby compromising living standards. The JCTR reiterates the need to rein in an expansionary fiscal stance that has over the years threatened the delivery of robust and inclusive social and economic development. In our quest for a better Zambia, the poor and the marginalized must not be ignored.

12 COMMENTS

  1. ECL and PF say they are building fly bridges , toll gates etc
    Those complaining about cost of living at K7,060.29,16% inflation rate and $27 billion in debt are just being political.
    Welcome to Zambia

  2. Majority, if not all , of world economies are experiencing negative economic growth due to covid. However your tribally and politically clouded empty heads will not allow you to see things as they are. To you it has to be blamed on pf because then you think it helps you get closer to state house. Zambians can’t be f00led. Come elections your demigod leader will cry again like a pregnant cat

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  3. The Kwacha is still depreciating so expect further price increases. The Euro bonds are also due for repayment, IMF is still refusing to lend money to corrupt governments etc. etc.

    Meanwhile, your president has kept quiet on who was gassing citizens. Instead, he bought military grade armour for the police to quash those that do not agree with his corrupt regime.

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  4. Xambians just keep suffering humbly as you are being humbly led by lungu. You have the chance and power to do what must be done next year so don’t waste the opportunity as it will take another 5 years to have another. Take the people you elect to task by making them accountable. Lungu doesn’t pay tax but uses your tax money so make him accountable

  5. Economies are struggling world over so why continue to blame ECL??? Just tighten your belts a d ride the tide for now. Things will get better in due time. Remember to play your part also as a citizen not just complaining. Pay your taxes while those of us out here that can afford, are sending money into our accounts there.

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  6. No other economy is suffering except for those lead by tin pot dictators. Look at how the south african rand has bounced back yet here the kwacha keeps on dununa reverse.

  7. Donald Trump grew the US economy but mishandled the Covid crisis- he is out. People do not want excuses. You are elected to solve problems and not to give excuses. Lungu, pray that between now and August 2021 Zambian fortunes turn for the better, otherwise Zambians will give you a bus ticket to Chawama.

  8. A weaker kwacha is not such a bad thing. It increase exports and reduces Imports. And it encourages foreign investment. Bank of Zambia needs to print money like all other countries are doing. Instead of borrowing. When an economy is health, correction healthish in Zambia’s case. Then printed money has a very similar local effect as borrowing money from other countries.
    Especially if the money is to be used to employ local labour and not for imports

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