REASONS WHY FOOD AND GROCERY PRICES ARE OUT OF CONTROL
Many Zambians are wondering what’s going on? Why are prices of goods and food shooting up uncontrollably without an end in sight ?
Let’s try to answer these questions for you in simple terms ;
1: The depreciation of the kwacha is a major factor, Zambia is an import driven economy (which is a very bad thing). We import most of the goods we consume, these goods are imported in dollars, so when the kwacha loses value, prices increase and inflation takes root because the people importing these goods use the exchange rate to set their prices and preserve their revenues and also for reasons on replacing stock which is imported.
Even alot of our locally produced goods have alot of imported inputs, especially in agriculture, things that we’re capable of making in Zambia but the government chooses to import.
WHAT IS CAUSING THE KWACHA TO COLLAPSE?
In simple terms its low exports and non productivity in the economy meaning fewer dollars coming into the country, increased imports meaning more dollars leaving the country, excessive government debt, corruption, economic policy inconsistency, tax policy inconsistency and political instability that is forcing foreign investors to pull back and out.
One of the biggest factors in the collapse of the kwacha has been mismanagement of the mining industry by the PF.
Copper production has halted since PF took over the Mines and this has reduced the inflow of dollars into Zambia, which has further weakened the kwacha.
2: Load shedding has been a major contributing factor, it has increased the cost of production and service delivery. Businesses have to use generators to operate and that cost is passed on to consumers.
Load shedding has also reduced productivity so manufacturers have to spread out operational costs over fewer products or sales resulting in higher prices for consumers.
3: High fuel and electricity prices are fuelling this inflation, these essential inputs of production and operations are passed on to the consumer.
4: Excessive government taxes.
WHAT’S THE SOLUTION TO THESE PROBLEMS?
1: A change of government and change of leadership.
2: An IMF Bailout that will help us get lower interest rates and longer debt repayment period to reduce financial stress on the treasury.
3: Austerity measures in government, unnecessary government spending must end. Reduce salaries and perks for senior officials, close some embassies abroad, close some ministries like Religion and Traditional Affairs, merge some ministries, get rid of DC’S Etc.
4: End Corruption and financial bleeding in government.
5: Restore full production in the mines by finding responsibile investors to improve dollar inflows into the country.
6: Impose tarrifs and bans on import of select goods. This will reduce the outflow of dollars.
7: Embark on a policy of local manufacturing. This will increase exports, reduce imports, stabilize the kwacha and create millions of jobs for Zambian youths.
8: End government borrowing, no more loans unless it’s absolutely necessary.
9: End load shedding by investing in coal and solar power plants that are not dependent on rains.
10: Reduce taxes on fuel and electricity. Get rid of the excise duty and remove the middlemen and corruption from the fuel procurement process.
