PRESIDENTIAL SPOKESPERSON MR ANTHONY BWALYA WRITES;
COST OF LIVING DISCUSSION
In economics, like in any other field, one needs to have an honest, unbiased perspective of a problem before they can measure it, let alone, solve it.
It all seems a bit convenient, to me, how the PF and their opposition surrogates are driving a false, poorly informed narrative about the cost of living question – a question President Hakainde Hichilema is answering in the unequivocal affirmative and positively overturning the economic damage of the past 10 years under PF mis – rule.
So, how did we get here?
1. In 2011, the PF inherited an inflation rate of 6.43% and by 2021, they had decimated it to a staggering 24%.
It means, over this period, prices of goods and services were spiking at an out of control pace.
2. In 2011, Zambia had a thriving economic growth rate of 5.56%, which by 2020 had dwindled to – 2.79%.
In fact, between 2012 and 2020, the economy had performed so poorly that the aggregate annual growth rate for the said period was – 13%.
What this means is that real productivity within the economy was non-existent. It also means that businesses were shutting down, jobs were being lost and incomes were being wiped away.
There is no other explanation.
3. Between the years 2012 and 2020, because of this lack of productivity in the economy, the Kwacha lost as much as 233% of its value.
This made imports exceedingly expensive, and in an economy where jobs and incomes were being wiped out, the pain was simply being compounded.
4. In the period 2011 to 2021, the pump price had gone up by at least 110%.
The PF alternative was to “effectively” borrow $67m every month to subsidize the pump price, and when they could not keep up pace, they opted to accumulate close to $1bn in unpaid fuel invoice arrears.
Now, when one looks at this diabolical historical background and poor economic management by the PF, spanning 10 years, it is not a surprise that the new administration took on a difficult but not impossible job to correct this mess.
This, fellow citizens, is the background to the cost of living debate – there is no other background, none.
What have we done in the last 1 year and 3 months to correct this historical 10-year-old problem?
1. We have slowed down the rate of inflation from 24% to around 9.73%.
This means prices of goods and services are not rising as fast as they had been under the previous regime.
2. We are successfully rebuilding the economy – growth is back to close to +3%, representing an annual change of close to +5%, all in 1 year.
This means productivity is coming back to the economy. It means jobs are coming back. It also means incomes are coming back.
A friend of mine owns a medium-sized snack manufacturing plant in Lusaka’s heavy industrial area, and he tells me business is definitely heading in the right direction.
3. The Kwacha is now one of the best-performing currencies globally, with better stability than the unpredictability of the last 10 years.
This has injected a new lease of confidence into the economy.
4. When it comes to fuel, we made a difficult but bold and necessary decision to stop subsidising fuel.
At the current rate of crude oil prices, we would need at least $79m per month to keep the pump price at K17 per litre.
Where would the money come from?
The country is already choking on a $23bn debt problem created under the watch of the other guys, and it would be nothing short of insane to be borrowing this kind of money to artificially keep the price of fuel down.
We have instead invested this money, money which is now actively being mopped up by sealing corruption loopholes, in our people via:
– Free education for thousands of our children
– CDF at K25.7m or $1.4m per constituency per year and this money has been fully paid.
– Investing in our local councils
– Investing in the higher education needs of our youth
– Investing in our marketeers ( booster loan facility)
– Investing in social protection of the vulnerable
– Investing in the employment of over 40,000 public sector workers with more jobs on the way
We are also no longer accumulating arrears fuel.
We are instead dismantling the toxic burden of close to $1bn the other guys left on our national books in unpaid fuel arrears.
So, fellow citizens, do not be swayed by the hollow, misguided half-truths of the other guys about the nature of the challenge we are facing and aggressively solving today – it is a humongous problem they created, but one which the President is gracefully, patiently and painstakingly combing through.
Zambia shall rise.
Amen