By BUUMBA CHIMBULU
IT is irresponsible for countries such as Zambia struggling to pay debt to continue subsidizing fuel.
Despite all the good effect the subsidies can do to a country, there is no moral justification for poor indebted countries to continue with them, according to a Financial Analyst, Naylor Kopakopa.
Mr Kopala said this was more critical if such poor countries had defaulted on their loan repayment in the past and looking for lenience from their creditors so that the loans could be restructured, saying, “Zambia fits here very perfectly. This is the only explanation why subsidies should be done away with.”
He said this in his analysis on fuel subsidies.
“The moral justification for Zambia to do away with fuel subsidies is higher than economic justification,” he said.
For two decades now, he said, Government had indicated that fuel was more expensive because the procurement process was inefficient.
Mr Kopala however said no one had been able to quantify the cost of that inefficiency.
“Neither is there anyone who has told us that something has been to curb this wastage. I hope that before the decision to do away with subsidies or before the next fuel price increase we will be given the breakdown of the price of fuel including the cost of the wastage. What if the cost of wastage is K10 and the subsidy is K10?” he said.
Meanwhile, Mr Kopala acknowledged that subsidies were good for economic growth and it would be better for poorer nations to subsidize fuel by as much as 100 percent.
Author
