Tuesday, July 23, 2024

Reduce the cost of Production, Zambia Federation of Employers urges Government

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The Zambia Federation of Employers (ZFE) has called on government to put modalities that will bring down the cost of production for businesses in the country.

Speaking to the media in Kitwe yesterday, Federation of employers’ president Evans Chibanda said the escalating cost of production is a threat to existing jobs as employers may opt for job cuts to sustain their operations.

Mr. Chibanda cited the factors of production such as fuel and the unstable Kwacha as some of the urgent essentials that should be addressed as soon as possible.

Mr. Chibanda wondered if government has removed the middlemen in the fuel value chain because the commodity has remained high and triggered the cost of production.

“The cost of fuel which is being reviewed every month is an overhead to business companies which means it will also push up operational costs and make it difficult to pay salaries and as a result some companies may opt to declare some jobs redundant to sustain their businesses and we do not want that,” he said.

He said government should find a way of stabilizing the cost of fuel despite the fact that the escalating prices of fuel are caused by external factors.

And Mr. Chibanda has described the first quarter of 2022 as being unfavourable to most of the employers across the industry due to continuously increasing cost of production caused mainly by the unstable Kwacha, escalating fuel prices and the effects of COVID-19 among other factors.

He noted that if nothing is done to arrest the situation, most companies will close up.

The high cost of production has for a long time been a problem among businesses in Zambia and little has been done by past governments to address the issue despite cries from the business community.

Yesterday, the Energy Regulation Board (ERB) has announced the upwards adjustment of the pump prices of all petroleum products effective midnight of Thursday, March 31, 2022.

ERB Board chairperson Reynolds Bowa said that the board has adjusted upwards Pump prices of petroleum products by K4.54 per liter for petrol, K3.93 per liter for kerosene and K4.68 per liter for diesel

Mr Bowa stated that the increase in the pump prices has been necessitated due to the continued strain in the global oil supply mainly due to the geopolitical conflict between Russia and Ukraine.

He added that the war between Russia and Ukraine has exerted additional pressure on the already escalating oil prices on the international market.

Mr Bowa noted that prices of finished products on the international markets have gone up steeply and continue to trade above 130 United States dollars per barrel.

“And on the domestic market, the impact would have been more adverse had it not been for the resilience and marginal appreciation of the Kwacha against the dollar during the period under review,” he stated.

15 COMMENTS

  1. This guy in New Kasama and reporting at State House to work has no idea how to do that. Don’t expect fuel to go up more and more and claims that Government is doing something about it is pure fantasy. The fixer is getting fixed as things stand.
    You close indeni at the directive of IMF.
    You make an energy policy out of IMF idea.
    Because of inexperience in the office (Government) this uncertainty and instability in the energy sector will get worse and worse as long as the war and other external international factors rages on.
    Government gave away sovereignty to IMF and when the heat rages on h² begins to understand how the world runs and how Zambia remains vulnerable to the international economic dynamics dictates.
    Kapala, there is nothing you can do to mitigate the effect of the war…

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  2. #2 You are very right, but there are plenty things government CAN do, like removing or at least reducing the rid!culous number of useless permits licenses and certificates that one needs to operate. And government can FORCE the banks to lower interest rates, and issue guarantees etc. HH can’t influence the price of oil on the world market but surely he can reduce the cost of doing business

  3. And in the meantime the Kwacha CONTINUES to depreciate, now back at K 18 to the dollar and going faster, while the REAL inflation is INCREASING to over 20% and going faster still. That’s not what was promised Mr President

  4. With this fuel cost the the cost of production is definately set to increase drastically. Company’s will struggle to keep operating.
    Food prices are definately going to sky rocket beyond what the ordinary person can pay. Unfortunately the employer will have no headroom to increase the salaries for employees. Then strikes will start……..What a world!!!!

  5. To claim things will get better in future is to assume you hold the future, but only God does. Time to better things is now!! PF experienced drought that saw water levels in Kariba dam to record low, as if that was not enough there came COVID and that completely paralyzed the economy. Yes, PF is being blamed for a lot of things but remember they were still expected to deliver under very difficult circumstances. So today to blame the current economic down turn on the war in Ukraine which just started a few minutes ago is sorry to say not a very good excuse. War or no War we expect the Govt to deliver, that’s the reason they were voted into office.

  6. While we appreciate the fight against corruption, we are not going to eat the fight against corruption, the same was said about PF and the roads by UPND (‘’ we are not going to eat roads’). The stomach is where it matters the most. I strongly believe as a Country we can find solutions to this fuel problem. The removal of subsidies was too brutal, it could have been phased out over time as new ways were worked out. Unfortunately people that make these decisions sit in air conditioned offices, drive in air conditioned cars with windows rolled up, Govt pays for their fuel and probably food. They don’t feel the impact as a commoner does. They imagine how commoners feels but trust me the don’t have the real picture.

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  7. While we appreciate the fight against corruption, we are not going to eat the fight against corruption, the same was said about previous government and the roads by Current government (‘’ we are not going to eat roads’). The stomach is where it matters the most. I strongly believe as a Country we can find solutions to this fuel problem. The removal of subsidies was too brutal, it could have been phased out over time as new ways were worked out. Unfortunately people that make these decisions sit in air conditioned offices, drive in air conditioned cars with windows rolled up, Govt pays for their fuel and probably food. They don’t feel the impact as a commoner does. They imagine how commoners feels but trust me the don’t have the real picture.

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  8. What exactly are you proposing as workable solutions to arrest the impact of escalating fuel prices globally on zambia. What you are saying we all know. Tifunako workable solutions not repeating what we all know already.

  9. It high time to propose workable solutions to the govt and not the otherway of making demands like people in the compound who usually say Boma Iyanganepo without suggesting any workable solutions.In the past there used to be much talk about importing crude oil from Angola?Has the issue of oil from Angola died a natural death? Indeni should be opened the cost of fuel is going high due to alot of costs involved in procuring,,one of them is Duty,unstable foreing exchange and it’s transportantion cost of the product,these factors should be addressed.

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  10. #10 A lot of suggestions have come forward, has the government taken heed. Sean Tembo comes with solutions and all he gets is name calling like MR ZERO. They promised manna let them deliver it.

  11. REDUCE COSTS ?
    HAVE YOU TRIED RUNNING A BUSINESS IN ZAMBIA ?
    PILFERING GOES ON AND ON
    WHY DONT YOU SPEAK TO CORPORATES AND FIND OUT WHAT PERCENTAGE THEY PUT ON ABOVE THEIR KNOW PROFIT MARGIN TO CATER FOR PILFERAGE

  12. I am now regretting having voted for UPND. It is very clear that Bally is not taking us anywhere. The cost of living is getting worse and worse. We appreciate free education and a virtual end to cadrerism at markets and bus stations. But these acts alone will not bring down the cost of living. You promised us manna from heaven as soon as you were voted into power. You said it from your own mouth that you had the magic wand with which to blow off the country’s economic woes. As an economist, the 2.8 million , who include poor me, believed every word you said and voted for you. We are growing tired of your endless excuses. PLEASE DELIVER ON YOUR PROMISES OR BRACE YOURSELF TO BE A ONE-TERM PRESIDENT.

  13. Why is talk about UPND perceived failures now, when they have not done their term? You really wish PF had continued? HH’s only apparrent flaw is insisting on following the rule of law. In his campaigns among other things he promised was the rule of law to prevail in handling you criminals and amongbhis priorites build tge economy. Ba ECL priority was to throw HH in jail and throw away the key.
    If HH had used the Riot Act to arrest you thieves in PF leadership, you would all be in jail as feared by Davis Mwila and the key thrown away. They have started processes to heal the economy against all odds, yet you choose to be armchair critics. The police start arresting suspects of criminal activities perpetuated by PF andvise existing Laws you cry foul and dont realise they obtained Bond…

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