By Christopher Miti
YOTAM Mtayachalo says the new dawn government must be very careful because it risks becoming very unpopular within a shortest period of time because of high cost of living and doing business in the country.
The Chama North PF member of parliament says the UPND administration risks being unpopular like Frederick Chiluba’s MMD if they depend so much on IMF policies which end up impoverishing people.
Mtayachalo, a former National Energy Sector and Allied Workers’ Union general secretary, said the monthly review of the fuel pump price in a country where the economy was not stable might lead to economic disaster because businesses could not plan for short, medium and long term.
“Further, on removal of fuel subsidies, I strongly feel it should have been done gradually in order to protect citizens from escalating cost of living and doing business in the country than what has been done. And I believe the end results will have negative economic consequences. Let us not be cheated, Zambians. There is no country which has completely done away with fuel and electricity subsidies, not even oil exporting countries such as Saudi Arabia, Iran, Nigeria and Angola just to mention but a few because the energy sector drives the wheels of production,” he said in a statement.
“For example, Nigeria spends about $17 billion while Iran spends $26 billion, Saudi Arabia spends $45 billion while Angola spends $3.5 billion annually on fuel subsidies. Therefore, who are we not to provide subsidies when all countries are doing it in order to protect their citizens and safeguarding jobs? While Angola is contemplating removing fuel subsidies, however the government is extremely cautious as it will be done in phases in order to minimise the negative impact on the economy and households.”
Mtayachalo wondered what would happen to the fuel situation in Zambia if the price of crude oil continued increasing.
“Imagine if the price of crude oil continues to skyrocket, for argument’s sake, it goes beyond $200 per barrel! Is government going to fold its arms and leave everything to market forces to determine the price without offering subsidies to protect households and jobs?” he asked.
“If we are not careful, we may end up again similar to what happened during the Chiluba administration which blindly followed IMF economic policies such as liberalisation of the economy and privatisation which led to economic disaster, high poverty and unemployment levels in the country. Therefore, the new dawn government must be very careful because they risk becoming very unpopular within a shortest period of time because of high cost of living and doing business in the country.”
And Mtayachalo said Zesco’s contemplated high connection fees would also undermine economic development.
“Zambia has a long way to go to achieve universal and sustainable access to electricity for all Zambians in line with the 2030 Vision deadline because of inadequate budgetary allocations to the Rural Electrification Authority for a long time now,” he said.
“We are remaining with eight years before 2030 benchmark, but it is unfortunate that only about 31 per cent of Zambians have access to electricity 57 years after independence with rural areas accounting for four per cent which is not a success story to write home about. Further with anticipated high connection and meter separation fees being proposed by the power utility it means that very few Zambians will have access to electricity, thereby undermining economic development and the quality of life for the majority Zambians because electricity is a critical driver in poverty eradication and job creation.”
Mtayachalo advised Zesco to instead broaden its customer base.
He said increasing fees for clients was very retrogressive.
“I find it retrogressive to allow Zesco to charge punitive new electricity connection fees in view of the low number of Zambians already accessing electricity because even at the current rates many people have no financial capacity to access electricity. Therefore, by increasing capital contributions, very few Zambians would be able to manage to access electricity,” Mtayachalo said.
“And as such what Zesco needs is to broaden its customer base, not increasing new connection fees. It will work against the power utility in the long run. What Zesco is suggesting is like mobile communication providers increasing the cost of sim cards. It will mean reducing their clientele hence resulting in reduction in their financial base.”
Mtayachalo argued that financial woes at Zesco would not be addressed by making new connection fees and electricity tariffs beyond the reach of many Zambians but by charging affordable and flexible new connection fees.
He said it did not make economic sense to increase new connection fees which were beyond the reach of many Zambians.
“Moreover, during the UNIP government new electricity connection fees were too exorbitant for majority Zambians and as such when Mr Robinson Mwansa became managing director in 1991, he put in place measures to make new electricity connection fees affordable. That’s the time we saw a significant jump in Zambians accessing electricity,” explained Mtayachalo.
“But by proposing to increase new electricity connections from K750 to K7,000 for meter separation and from K1,700 to K6,995 for new electricity connections you are killing the nation and suffocating the company from having more electricity customers. Hence people will resort to charcoal burning and lead to deforestation. And as such attaining universal access to electricity by 2030 shall remain a pipe dream.”