Amidst the Covid-19 pandemic that has hit Zambia hard economically, it is necessary for all possible gains to be transferred to the people to help cushion the dire economic effects of the novel Covid-19. Fuel is one such critical commodity that directly affects the cost of business and has a significant bearing on the local economy. There has been an unprecedented slump of oil on the international market, including “Murban Crude” the blend of crude that is imported by Zambia.

On 23 April 2020, ERB through the Public Relations Manager Ms. Kwali Mfuni issued a statement titled “Fuel Pump Prices in the Light of Current International Oil Trends and Kwacha Performance”. In the statement the ERB has claimed that the current gains from the sustained reduction in international oil prices have been negated by the depreciation of of Kwacha in the same period and therefore resulting into no price change since December 2019. This leaves much to be desired as a simple calculation will show you that the Kwacha amount of a Barrel of Crude is significantly cheaper today than it was in January regardless of Kwacha depreciation.

The general populace must be concerned and join in questioning the ERB Board why they have not taken critical consideration of the prevailing situation, Zambians are currently in distress and deserve a break especially that it is justified as follows; In Q1 Jan 2020 a Barrel of Murban Crude was selling at Us$69 with the Kwacha exchange rate at ZMW14.40/Us$, meaning a barrel of Murban was fetching ZMW993.6, the price of Murban Crude on 23 April 2020 was selling below Us$20 (Us$19.01 to be precise with a days delay from a Record low Us$15.44 the previous day), the Kwacha exchange rate is about ZMW18.70/Us$ using Us$20/bbl, a barrel of Murban Crude is fetching around ZMW374 currently. There is a massive difference between ZMW993.6 and ZMW374, ZMW619.6, which should amount to a significant downward Fuel adjustment of some sort, as the difference cannot only buy an extra barrel but there will be a whole lot of change. It is very unfortunate that instead of painting a real picture, the ERB has opted to vaguely elude the Zambian people to justify non adjustment of fuel.
I call upon Mr Raymond Mpundu to urgently sit with his ERB board and critically consider the disparity the major factors that determine fuel prices have brought or perhaps give a more elaborate and convincing outlay of the “Cost Plus Model” and perhaps call for its review. Covid-19 is everyone’s struggle may we all play our part in easing the fight and a fuel downward adjustment will guarantee public benefit. Let us rise to the occasion together we can defeat Covid-19.

Daniel Sichilongo
Secretary General
Green Party of Zambia

The Forum for Democracy and Development has saluted the timely decision taken by the Bank of Zambia to allocate K10 billion to commercial banks and other financial institutions to enable Small and Medium Enterprises to access credit facilities from these institutions at a reduced interest rate.

Party spoke Yotam Mtayachalo says this will revive businesses that have greatly been affected by the effects of the Coronavirus pandemic.

Mr. Mtayachalo has however expressed concern that small businesses, especially in rural areas, have had difficulties in accessing credit facilities due to a number of challenges among them few or non-availabilities of credible lending institutions and issues of collateral just to mention but a few and stand to lose out a great deal as opposed to their colleagues in urban areas.

He has appealed to financial institutions and the central bank to ensure that these resources are fairly allocated to all districts so that they can be accessed fairly by all deserving beneficiaries because rural-based Small and Medium Enterprises involved in Agro-processing are very critical in job creation and economic emancipation and therefore must be supported if they have to grow into large business undertakings.

Further, Mr. Mtayachalo said financial institutions should also relax stringent conditions attached to acquisitions of these loans especially on issues of collateral because many rural business undertakings do not have title deeds on their properties hence accessing credit facilities remains a tall order or a pipe dream.

He said the government should also come up with a deliberate policy by offering incentives to indigenous financial institutions which also operate in rural areas such as the National Savings and Credit Bank so that many rural-based industries can benefit from credit facilities at reasonable interest rates.

Mr. Mtayachalo said the COVID-19 pandemic undoubtedly continues to inflict a huge toll on human life and the global economy nevertheless it has also provided a window of opportunity for Zambia and Africa at large to seize this opportunity and support Agro-businesses and other homegrown manufacturing industries to boost industrial development.

He said it is very unfortunate that the well-intended establishment of some lending financial institutions by the UNIP government such as the Development Bank of Zambia was meant to promote the country’s industrial development but such institutions have failed to achieve their intended objectives because most often they offer credit facilities to the elite at the expense of local SMEs.

“It is our desire to see a situation where the majority of deserving Zambians benefit from the K10bn credit facility offloaded on the financial market by the central bank as a way of empowering Zambians economically amidst covid19 instead of Zambians being used as fronts of foreigner nationals if the country has to create the much-needed wealth at the household level for the local people hence uplifting the majority of our people out of perpetual jaws of poverty which is more pronounced in rural areas”, he said.

When the coronavirus first became the topic of conversation on world news, I kept my fingers crossed hoping it wasn’t going to reach Africa, not least Zambia, my beloved country. Alas, it has.

I appreciate the efforts the government is putting in place to combat the spread of the virus. It goes without saying that Zambia’s current health infrastructure isn’t prepared to deal with the severity of the pandemic should the situation currently happening in New York City befall us. While I understand on an intellectual level that the lockdown is most likely our best approach to prevent the spread of this deadly virus, on a practical level, I don’t think it’s a sustainable approach—especially in a city like Lusaka.

Why am I taking this stance? It’s important to understand that the city of Lusaka is unlike cities such as London or New York. People in these foreign cities can survive during the lockdown but in Lusaka, life takes a whole different shape. To begin with, the majority of people in Lusaka fall under the category of informal employment. This largely means when people go to work, they don’t report to offices. Rather, they report to the streets. Essentially, the streets and roads are their offices. You only have to walk the streets of Lusaka and you’ll see people selling secondhand clothes, fritters and doughnuts, phone accessories, to mention just a few. These people don’t spend their time on the streets to make surplus income. Instead, they do it for survival. Hence, enforcing a mandatory lockdown in Lusaka will only result in starvation to many families.

Secondly, the lockdown is likely to exacerbate the problem of homelessness. Unlike in Western countries, landlords in shanty compounds of Lusaka such as Kanyama and Chibolya aren’t rich people. They rely on rentals from tenants to feed themselves. Many of these tenants make their money by getting out in the streets to run their informal businesses. The lockdown makes this impossible, making them unable to pay rent. The landlord is left with no choice but to evict them from his property.

Lastly, the lockdown causes economic activity to slow down, if not come to a halt. It doesn’t take an economist to realize that income reduces when economic activity slows down. The downside of this scenario is that it is likely to lead to higher rates of crime. When people are fighting for survival, they do desperate things—even breaking the law becomes an option. Yes, the lockdown may be good at preventing the spread of the virus, but it’s important to understand the implications of this course of action to the many small business owners in Lusaka who rely on being on the streets to generate income. Those with government jobs have dodged the bullet of this lockdown, but they’re only a few. Authorities need to remember that informal is normal in Lusaka. This lockdown is hurting the masses.

By Joram Mutenge

The author is a Zambian student in the USA pursuing a Bachelor’s Degree in Philosophy.