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… as removing subsidies on fuel will be catastrophic


ZAMBIA must brace for hard times because removing subsidies on fuel will be catastrophic to the country as prices of goods and services will increase drastically, Democratic Party (DP) president Harry Kalaba has said.
“Zambians must brace themselves for the years ahead, they will not be easy, they will only be getting harder,” Mr Kalaba said.

Mr Kalaba has urged the new dawn government not to bow down to pressure from the International Monetary Fund (IMF) to scrap off subsidies even as it works to secure a bailout package.

He said in an interview that removing subsidies would increase the price of fuel and subsequently lead to an increase in the prices of goods and services.
“The prices of essential commodities will be high once subsidies are removed because they will be in tandem with the fuel price. It will be a catastrophic situation, very sad development,” Mr Kalaba said in an interview.
And Mr Kalaba, who is former Foreign Affairs minister said it was not a secret that the move to remove subsidies was one of the conditions of the IMF.

He said the IMF deal come with fiscal financial discipline and that the fund dictates the terms of reference for the agreement.
Mr Kalaba said IMF insists on cutting down costs for the government on fuel by ensuring that subsidies were removed.
He said in most cases the IMF also insists on the removal of subsidies on electricity in effort to promote cost reflective tariffs.

Mr Kalaba urged Zambians to brace themselves for tough times in the years ahead as more drastic decisions would have to be made.
He said currently even electricity tariffs were not cost reflective as they were heavily subsidised.
Finance National Planning Minister, Situmbeko Musokotwane announced that Government spends US$21 million per month to subsidise the price of fuel and that going forward the country has to make the choice whether or not to remove the subsidy so that the money can be spent on other issues.

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