By Dr Canisius BANDA, Development Activist
Zambia’s CSO announces single-digit inflation. Fools rejoice. The wise frown. No citizen smiles. All economic experts remain askance.
Then the Bank of Zambia steps in. It comes to say, explaining, that the single-digit recorded, the 9.7 percent, is the rate at which prices continued to rise over a given, measured period. The BOZ does NOT deny that prices are rising. Without a word, it acknowledges that the cost of living in Zambia is now reaching a breaking point. Some of its own workers are grumbling.
Every day, the people in the compounds feel the negative impact of the rising prices, they groan. And with the rising prices, the people’s anger also continues to rise, their BPs now causing splitting headaches. How high the people’s anger will rise no one really knows.
But what is certain, if we continue on this path, is that a socioeconomic storm will soon hit Zambia. Something will happen. The dam of anger will burst. Something gotta give. The clouds are gathering. The birds have all flown away, and an eerie calm now obtains. Salaries have remained stagnant in Zambia. They are not predictable anymore. The cost of production is daily going up. Prices are rising. Consumer purchase power continues to erode. The level of credit in the economy has fallen.
Copper prices are plummeting, from a high of USD 11000 per ton to about USD 7000 now. The government has given Zambia’s money away to mining companies through tax holidays. The Federal Reserve Bank of America will again soon increase its interest rates. Zambia’s debt will also soon increase. The fiscal space will shrink further. Over time, Zambia’s gross national income will gradually continue to fall.
And as all this happens, the expenditure side of Zambia’s budget continues to grow. Come on, Denny, watch that Imports-Cover carefully now! The clouds are gathering. An eerie calm obtains. Global winds of economic and political change are blowing.
Any worthy expert will tell you that Zambia is presently veritably in a state of STAGFLATION, a state of chronic high inflation in the midst of high unemployment rates and stagnant and falling consumer demand. This is a precarious economic situation, a clear prelude to a socioeconomic volcanic eruption. Debt cancellation and government economic stimuli are now recommended. Barring these, companies will be hurt, jobs will be lost, incomes will further fall, further hurting consumer spending which will further hurt companies, which will further hurt… A vicious cycle. See?
And then collapse. You see when one borrows one must pay it back. That is a sacrosanct law of business. When this law is flouted it hurts everyone involved. If an entity repeatedly borrows and repeatedly fails to pay back and, such an entity is repeatedly saved through debt cancellation, that then, my dear friends, is the very definition of idiocy.
See? Corporate/entity cognitive lameness. Zambia has all it needs to survive and prosper as a sovereign nation.
Everything, except something.
What then is required?
The enlightenment of its people. The realisation by Zambians that, through resource security and fair trade, Zambians themselves must collectively exploit their God-given resources for their own communal well-being. An aware people, a people confident in themselves than as a sovereign, that is the only way to live. A people accommodating to strangers but wary of them. But then the impending collapse of the US Dollar as a reserve currency might just be the divine intervention that will change the whole game.
BRICS plus. Zambia keep your gold! For now, the clouds continue to gather. The ground is shaking. The rocks are moving. The smell of sulphur is in the air. The socioeconomic volcano is about to erupt. There is trouble ahead. Serious trouble. Terrible times. Terrible. We pray.