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Tuesday, 22 April 2014

Analytical Comedy

I came across this comment in the Times of Zambia by a "concerned citizen" (whatever that means) :
"The increase in fuel prices by the Energy Regulation Board (ERB) last week cannot be blamed on the Government. The price of the same commodity has been upped on the world market and with the depreciation of our Kwacha the increase was unavoidable. Painful though it is, it is important sometimes to live in reality than artificial world were you move with time. Once the Kwacha stabilises we expect a reduction in the price of fuel without delay. Traders and all those who will increase prices of their goods and services are equally expected to swiftly reduce without much ado. With the coming of more dollars from the newly subscribed Eurobond we anticipate the Kwacha to gain"
(Source : Times of Zambia)
When I first read this, I thought it was a foolish comment. But then I remembered that the comment is entirely logical if one believes that the depreciation of the Kwacha has nothing to do with GRZ but is purely due to global factors [as PF supporters have long argued]. 

In his world government is the hero that will deliver low prices when the Kwacha allegedly becomes stronger, against the odds. Its analytical comedy, but many people hold that position. So "concerned citizen" is being entirely consistent. To be clear, he is being "foolishly consistent". But consistent nevertheless. We have to give him that!

Chola Mukanga | Economist
Copyright © Zambian Economist 2014

Sunday, 20 April 2014

Fuels Prices Rise

ERB last week released the following press statement :

The Energy Regulation Board (ERB) has increased the pump price of petroleum products by 7.22% for petrol, 8.75% for diesel and 9.54% for kerosene, while wholesale prices have been adjusted by 11.15% with effect from midnight 17th April 2014.

The exchange rate of the Kwacha against the US Dollar depreciated significantly from K5.40 at the last price review in April 2013 to the current level of K6.20 to the US Dollar by 14.8% cumulatively. This cumulative depreciation of the Kwacha against the US Dollar has been the major trigger for this fuel price increase.

Saturday, 19 April 2014

Mealie Meal Prices

It is very shocking that a bag of mealie-meal is very high in the country and I have already met ZNFU and I am yet to meet MAZ in order to resolve this matter
(Agriculture Minister)

The price of mealie meal is around K82 per 25kg bag in some parts of the country. It is costing 50% more than it did this time last year. Unfortunately, as Elias Chipimo (NAREP President) has helpfully pointed out the situation is much worse:
Studies show that a 25 kilogramme bag of industrially milled maize costs between K75 and K90 (or more depending on which part of the country you are buying it from). What these surveys do not reveal, however, is that the majority of Zambians do not have enough money to buy their monthly mealie meal requirements at one go. Instead, they often have to purchase their staple diet one meal at a time. Being forced to purchase mealie meal in small units (pamela – one standard cup measure at a time) means that the poor spend in total K126 (over Kw50 more) on buying a full bag of mealie meal than those in the middle class who may have enough ready income to purchase a full bag at one time for Kw75. For the poor, the cost of living has become so high that relatively few people can afford to have even one decent meal a day.
(NAREP President)

Thursday, 17 April 2014

Debt Worries

“Our debt situation is becoming unsustainable and if you look at the country’s economic report of last year, the external debt is at US$3.5 billion, and if you look at the Bank of Zambia first quarter report states that the total amount of domestic borrowing is K20.7 billion and if converted will give you another US$3.5 billion bringing the total debt to US$7 billion which the country has as at now....By the end of the year both local and external debts would be about US$11 billion which is unsustainable because it [would be] above half of our equity of the country’s GDP which stands at US$25billion, according to the current CSO statistics which they are now using"
Economist | Politician

(Source : Daily Nation)

Wednesday, 16 April 2014

Coming Clean!

"We are creating very few jobs...the direct employment from the mining sector is only 1.7 per cent...Go to the Copperbelt, look around and what you see is a ghost town in many ways. Everything has collapsed; the social sector and the mines are just sitting there, sinking new operations in the middle of this devastation. We have a lot of work to do to establish ourselves as a copper country with proper effect on the people"
(Vice President, Zambia)

Monday, 14 April 2014

A waste of resources

Zambia Union of Journalists (ZUJ) has called on the Government to bail out state media workers (e.g. Daily Mail, Times of Zambia). It draws its membership from the state media. ZUK president James Muyanwa says :
Our members at Times Printpak Zambia Limited, have suffered for a long time now. The workers have been getting their salaries late for about four years now. For instance, currently they are in two-month salary arrears, and have literally been surviving by the grace of God.....Given this situation, we feel the Government should move from mere words to action on the matter to salvage the company from total collapse and also address the plight of our members. We feel that the company, as a public institution, deserves the same treatment as Nitrogen Chemicals of Zambia (NCZ) and Zambia Railway Limited (ZRL) have received. It requires a bail-out package in line with what was given to NCZ and ZRL. We realize that even if it is a limited company Times needs subvention from the sole shareholder – the government." (Source: Mwebantu)