ECONOMY | Hichilema puts cost of living, jobs at centre of 2nd-term economic agenda
President-elect Hakainde Hichilema says reducing the cost of living and creating jobs will be the two central economic priorities of his second term, as his administration seeks to turn improving macroeconomic indicators into gains felt by households.
“This term will focus on two things above all: bringing down the cost of living and creating more jobs. Every decision this Government takes over the next five years will be measured against those two tests,” Hichilema said in a statement issued by State House chief communications specialist Clayson Hamasaka.
The statement followed new data from the Zambia Statistics Agency showing annual inflation slowing to 6.2 percent in August from 6.5 percent in July.
Inflation was about 23 percent when the UPND took office in 2021 and has now returned to the Bank of Zambia’s six-to-eight percent target range.
For households, however, falling inflation does not mean prices are falling. It means the overall pace at which prices are increasing has slowed. This distinction will be important as the government attempts to demonstrate that improving economic statistics can eventually translate into stronger purchasing power.
“Lower inflation means your money goes further. Lower borrowing costs mean government can do more with what it has,” Hichilema said.
“Both are the result of the hard choices we have made together over the past five years, and both tell us that the discipline is paying off.”
The President-elect also pointed to Zambia’s first government bond auction since the August 13 election as evidence of improving investor confidence.
According to State House, investors submitted bids 37 percent above the K6.3 billion offered, with particularly strong demand for the seven-year government bond.
The yield on the seven-year instrument fell by more than one percentage point compared with the previous auction.
Lower government bond yields matter beyond financial markets. When the State can borrow at lower rates, its debt-servicing burden can ease over time, potentially leaving more fiscal space for infrastructure and public services. Sustained reductions can also contribute to broader improvements in domestic financing conditions, although commercial lending rates depend on several other factors.
The more difficult part of the second-term agenda will be translating macroeconomic stability into household economics.
Zambia may have brought inflation back within the central bank’s target range, but families still face the accumulated effect of price increases over previous years, while unemployment and limited formal employment remain significant concerns, particularly among young people.
Hichilema acknowledged this gap, saying many households continue to face high living costs despite the improvement in headline indicators.
The economic test of the next five years will therefore move beyond stabilisation. Inflation has fallen and investor appetite appears stronger. The next question is whether those gains can produce cheaper credit, stronger incomes, more jobs and a cost of living that households can actually feel coming down.
-The People’s Brief | Francine Lilu