Dear Editor,
The new dawn administration is contemplating to increase the price of fuel and electricity. The increased price of fuel and electricity will arise from removing subsidies on fuel and increasing the electricity tariff.
The above measures look good on paper but, they are not the best in that they are not the best in that they will create hardships to both the consumers and the entrepreneurs.
In a nutshell, the consumers should brace themselves for the high cost of living in that the price of goods and services will be too high to afford. On the other hand, the entrepreneurs will also feel the impact of the increased price of fuel and the upward adjustment of electricity. This is because the cost of doing business will be unbearably high.
The small and medium enterprises (SMEs) have been adversely affected by the effects of the coronavirus. The entrepreneurs who deal in welding, salon and barbershop business will be affected so much if electricity tariff is increased.
The entrepreneurs are not making adequate profit to sustain their business operations. The worst scenario is that some business enterprises have wound up and others have downsized the labour force thereby rendering many people jobless.
However, the trickle down effect of people losing employment is that it leads to abject poverty to the families of the affected employees. It is a well known fact that most people in Zambia survive on less than one United State dollar (US$1) per day,
High taxes have crippled most business entities in the country. There is therefore need for the Zambia Revenue Authority (ZRA) to either reduce taxes or broaden them so that many taxpayers will be captured. Ultimately, the Government will still collect more revenue beyond the projected amount.
In an economic sense, the price of fuel and electricity have a great influence on the price of goods and services. The simple narrative is that any upward adjustment of the price of fuel and electricity will trigger the high cost of living. On the other hand, the cost of doing business will be high.
The United Party for National Development (UPND) won the August 12 general election on the premise of bettering the lives of people. The Government’s intention to increase the price of fuel and the increase in electricity tariff entails that the new dawn administration is on the wrong trajectory insofar as uplifting the living standards of the people is concerned.
In conclusion, the UPND Government should not be in haste to effect the hike in the price of fuel and electricity. The measure, if implemented, will ultimately lead to the high cost of living.
ELEMIYA PHIRI Lusaka.
Author
