NEW DAWN SHUTTING DOWN LOCAL INFORMAL SECTOR
Issued: 22/09/23
The escalating high cost of living deeply shows that President Hakainde Hichilema and his Cabinet lack some basic understanding of how the Zambian local economy functions.
To a large extent, the high cost of living in the new dawn administration can be traced to two factors introduced by them namely;
1. Perceived mopping up of excess cash from the local economy. By increasing the monetary policy rate (MPR), President Hichilema is literally shutting down the INFORMAL LOCAL SECTOR which sustains the majority of Zambian’s outside formal sector.
First, less money in local circulation has directly hit local small and medium businesses with very LOW SALES whilst the cost of doing business is equally increasing.
Secondly, the majority poor who depend on the informal sector can no longer AFFORD the basics such as mealie meal hence the cries in the compounds of njala! insala or hunger.
(Check our press statement on 22/12/22: PRESIDENT HICHILEMA’S EXCESS MONEY A HOAX)
2. The fluctuating fuel prices. A closer look in the foreign exchange regime indicate that all the major convertibles are dancing to the song of fuel prices by the ERB.
This is extremely catastrophic in an import led economy with more than 80% of the products on the shelves of tutemba’s, groceries and supermarkets from outside the country.
As long as the dollar is dancing, all the Zambian’s will have to dance gule wamkulu to the high cost of living and doing business.
In my view, a long term approach to these 2 variables can provide some relief to the majority of our people. For example, flood the local economy with money for Zambian’s outside the formal sector to have disposable income. (RB’s economics, RIP Mr. President)
Monthly fuel price reviews must be stopped forthwith and replaced with only 2 price reviews in each half of the year, preferably in march and august respectively.
Silavwe Jackson
President
GPZ