EconomyLetters

Government has moved in to cut price hikes

Dear Editor,

THERE has been an increase in the price of some goods such as cooking oil, flour, cement and other goods in the recent past.

The price hikes has been due to among other things, the Covid-19 pandemic, the fluctuations in the exchange rate and inflationary shocks.

It is important to note that:

  • Zambia is an import-based economy. We import most of the things we use. So the price of commodities at the international market has a direct impact on the price of consumer goods here at home.
  • The Covid-19 pandemic has disrupted the entire global production and supply chains. A lot of companies have been forced to shut down or reduce their production capacities, creating a shortage of supplies thereby leading to hikes in prices. 

The world-wide lockdowns have also disrupted supply chains, causing shortages of essential goods which automatically has resulted into price hikes.

  • The adverse effects of climate change; the electricity shortages coupled with debt repayments and commodity prices such as fuel on the international market have all contributed to the fluctuation of the Kwacha against the major convertible currencies. This has put pressure on our currency and has increased inflation.

As a responsive and caring Government, President Edgar Lungu and his Government have come up with a comprehensive Economic Recovery Plan to tackle among other things the     price of commodities.

Government has reaffirmed its commitment towards curbing further hiking of prices of goods and services;

  1. Government has scrapped VAT on fuel to stabilise the price of fuel which is one of the key drivers of prices of goods and services.
  2. Load shedding is coming to an end owing to the massive investments Government has pumped in the Energy Sub-Sector. Electricity like fuel is also another key driver of prices of goods and services.
  3. Government has engaged the Competition and Consumer Protection Commission (CCPC) to ascertain whether there is collusion and dominance among market players.
  4. Government will soon amend the Bank of Zambia Act to halt the quoting of prices for goods and services in foreign currencies.
  5. Government has among other things scrapped off the import duty of products to strike a balance in the market supply chain.

Let us remain resilient; we shall overcome all these temporary setbacks.

Thank you.

ANTONIO MOURINHO MWANZA.

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