THERE are various negative multiplier effects of the Covid-19 pandemic that includes unemployment, exchange rate volatility, rising inflation, disruption of the supply and demand of goods and services, the disruption of the value chain and distribution systems, and worst of all loss of human lives.
Loss of human lives can simply mean loss of human capital which is a key and necessary factor in all economic activities.
Covid-19 has very devastating effects not only on people’s direct health, but also on the well-being of a country’s economy, especially food prices not only in Zambia, but across the globe.
It is worth to demonstrate to the Zambian citizenry how Covid-19 has affected the food prices. Covid-19 has affected the cost of food production from the farms, chain of distribution to consumers.
This is in terms of the cost of production, supply and distribution. The volatility in food production and supply has been caused by measures that have been put in place to stop the spread of the virus that include economic lock-downs – either complete or partial lock-downs.
For example, internal movement barriers and lack of transportation can lead to food not making it from rural areas to urban markets or making at a slow pace and high costs.
This has resulted in a supply-demand mismatch and perhaps upward pressure on prices as we have witnessed across the globe.
There have also been situations where food price changes result from consumer demand shifts, such as a shift in preferences towards less perishable foods that need to be stocked as people are required to move less and also speculative thinking of prices likely to go up due do this mismatch in supply and demand of commodities as the pandemic spread.
Even countries that try to do partial lockdowns are affected by complete economic lockdowns in other countries especially countries that are a source of supply as the case for Zambia and its economic dependence and interconnectedness to South Africa and China as major suppliers of most merchandise including food of all types.
It is also worth noting that the Zambian economy has demonstrated its resilience despite being highly dependent on South Africa for merchandise that stocks most of the multinational chain stores.
This is because of Zambia’s “Buy Zambian Campaign” and the Local Content Strategy initiative.
The key lessons Zambians need to get from the Covid-19 economic shock experience is to believe that the Zambian economy can withstand shocks even more if the agriculture and processing and manufacturing industries are supported by putting to reality the “Buy Zambian Campaign” and the Local Content Strategy.
Back to the drivers of food prices, larger drivers outside the food system – e.g., changes in currency values or oil prices also influence prices, food emphasising the interconnectedness of economies and how food systems are embedded within even larger economic systems than the Zambian one.
Covid-19 has affected the incomes of Zambian farmers and sellers of farm produce such as marketeers at Soweto, Chisokene, Nakadoli, Chiwempala, Nakambala, Maramba, Masala, Malanguzu markets just to mention a few across the country.
This is because food prices affect the incomes of farmers and other supply chain actors who make their living from selling food.
In economics, there is not only one side to any economic intervention or activity. It is worth noting that while we might focus on rising food prices, there are some sections of the agricultural sector or food sector where there has been declining food prices and this has had a negative impact on producers and sellers of such produce.
The decline in such prices could be due to declining disposal income due to loss of jobs and consumers substituting certain foods for mainly essential ones.
Empirical evidence shows that falling food prices are good for net consumers of food but can cause real economic pain for net producers.
The impact of Covid-19 on food prices should not be downplayed or ignored by front-runners in the coming elections.
There is need to continue supporting all government initiatives that are already in place to mitigate the global and local rise in food prices, such as not locking-down the economy, allowing markets and other trading places to operate normally, and concerted efforts towards the provision of the Covid-19 vaccines. It is through such measures that the impact of Covid-19 on food prices shall be mitigated.
In conclusion, as recommended by the GAIN study, “Governments (such as the Zambian Government) and other stakeholders need to work towards lessening food price changes by keeping their food supply chains functioning and buffer any effects of food price changes on their most vulnerable consumers (and, where needed, producers), through efforts such as subsidies, fixed prices, food distribution, or other social protection programmes.
President Lungu and his Government have successfully implemented this as they attempt to cushion the poorest of the poor and the middle class.
It is also worth indicating that keeping borders open and food flowing is also key to preventing food shortages and resulting price increases.
Any such actions need to focus not only on main staples but also on highly nutritious foods (such as legumes, vegetables, and animal-source foods), the consumption of which is crucial for preventing malnutrition – as opposed to just alleviating hunger.
This the current Government is already implementing and should be commended on this.
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*The author is an academic. Send comments to lecturer.researcher@gmail.com.
