VERY WORRYING ECONOMIC OUTLOOK
Our country’s economic outlook is beginning to worry us more than ever before. Mr Hakainde Hichilema and his UPND government have taken an appeasement policy of increasing maize prices but the spiral effect of this will go beyond their single focus of promoting maize production.
They have addressed the supplier issue of selling price but they have not addressed the high input costs of fertilizer and other farming inputs. Simply meaning, production inefficiencies have been priced out in the selling price. What they are forgetting is that the impact is beyond mealie meal. All livestock products will go up as well. They have ignored the end user (consumer) consequences in the equation. What they should be addressing is the real issue of low yields arising from lack of mechanization at peasant farmer level, provision of extension officers which will result in high yields per acreage. Most importantly, the cost of inputs.
To protect the end user, smart subsidies should be provided by government at the production level to bring down the cost of production and this would have resulted in a moderate price increase in the floor price. No agriculture system in the world has progressed without government support. This is another example of being operationally minded as opposed to strategic thinking around a long term sustainable agriculture policy. End result is the that we are in the maze because of maize and the consequences will be severe on the consumer in the second half of 2023. Let’s brace ourselves for harder times ahead.
Worse still, there is no silver lining on the horizon because there are no major economic activities in sight which will be coming on board to mitigate the current gloomy picture. Even with the new fertilizer factory, we are sure in the financial modeling of the project, there is an indicative selling price which has not been mentioned to give us hope. The praised FQM billion investment has so far not shown its face.
Kwacha will even be under more pressure to the Dollar once we reach a debt restructuring agreement as we will have to clear the arrears plus interest for the repayments we have not made for close to two years plus.
Fred M’membe
President of the Socialist Party