By Peter Sinkamba

UNDERSTANDING INFLATION TRENDS IN ZAMBIA: VERY IMPORTANT

Inflation in Zambia, and pretty everywhere in the world follows a particular trend or pattern over a period of time. In Zambia, the trend has been that there is spike during periods of elections and political uncertainty. After elections and periods of uncertainty are diffused, inflation rate always reverts to below single digits.

For example, in the last 20 years, there was a spike run-up to the 2006 elections reaching almost 20%. Shortly after elections, the inflation rate reduced to about 7%. In 2008, there was a spike that climaxed at about 17% due to the election occasioned by the sudden death of President Levy Mwanawasa but reduced to about 10% within three months after the election.

Concerning the 2011 elections, the spike was marginal. A number of factors could be attributed for the marginal increase. First, the late President Ruphia Banda brought about some semblance of political stability. Campaigns were largely free and fair. Secondly, regime change did not appear certain. Perhaps, this explains why the late President sobbed when handing over power to the late President Michael Sata.

With regard to the 2016 elections, the spike was very high, rising from around 7% in 2015 to about 24% in 2016. With 10 months, the inflation rate reduced to around 6%.

As for the 2021 elections, the spike was highest reaching almost 25% around election time. Within 10 months, the rate has reduced to around 9%.

On one hand, the main reason for spikes is adoption process where aspiring candidates spend lots of money to find their names on the ballot papers. And they spend more money on campaign materials and campaign programmes to find themselves in council chambers, parliament and State House. On the other hand, the spike is generated by Government expending colossal sums of money on election preparations and holding of elections. The inflation spikes by and large last between 5 to 10 months as is shown in the figure below.