Zambian households will have to brace for a rough 2020, as inflation sets to sky rocket, following a 200 percent increase in electricity tariffs, while fuel prices have also gone up.
With the economy already performing very badly and the local currency, the Kwacha at an all-time low, this is likely to push a lot of families into dire economic situations.
The new fuel tariffs came into effect on Thursday, December 26, 2019, while those of electricity will be effected on January 1, 2020.
Announcing the increments, in a statement, released Thursday night, the Zambia Energy Regulation Board (ERB), board chairman, Raymond Mpundu, stated that the hiked tariffs for power, would be used to improve operations at the Zambia Electricity Supply Corporation (ZESCO), which is said to be technically insolvent.
“In summary, ZESCO is facing serious financial problems with regards to its profitability, liquidity, solvency and efficiency,” reads the statement in part.
Clement Mweene, a Taxi driver in Kabwata, a middle income township says the fuel increment will negatively affect his business, as most people will likely opt to walk to work and other destinations, instead of paying high taxi fees, as he will have no choice but to hike his fares, to meet the fuel costs.
“The power of booking will lessen. I operate in Kabwata, which is central and surrounded by most places people tend to go to, such as the city centre, hospital, shopping malls, office parks and others. So, they will walk.
Before the increment, 50 kwacha (about U$4) would buy me enough fuel to take three trips between town. I would go, come back and go again. But now, it will only be one trip, so I have to increase my charges,” he laments.
The increase in transport costs will mean hiking of prices on other products too, as business people such as food sellers, often book taxis to buy their goods from farmers and wholesalers, to re-sell at retail prices, hence their pricing has to cover the expenses incurred, as Chipampa Makungu, a vegetable seller, attests:
“We will have to adjust our prices upwards, if not, there will be no profit, because we will have to pay more for transport booking.”
On electricity tariffs increase, David Mubanga, a Lusaka resident observes that, while the increase is partially justified, in that ZESCO needs to cushion the effects of their operating costs, most ordinary citizens have less or no income, meaning their households will be badly hit.
Other residents, feel this is a sign of a failed leadership, where prices continue going up, with low liquidity and the country being riddled with all sorts of taxes.
“2021 can never come quick enough, so we can vote this President and political party out. Zambians, we learn like this. Now you will learn that let’s not toy around with leadership, but vote for visionary leaders.
During the past elections, voters fell for campaign songs [that were composed in praise of the president and ruling party] and voted on the basis that they were fun. This is the result. Now let’s see who is going to dance, as they did,” said one gentleman, who could not disclose his identity.
This development comes just a month, after the cost of living in the capital, Lusaka, was reported to have gone up, in October, by the Jesuit Centre for Theological Reflections (JCTR), a faith based research, education and advocacy organisation, which has for years, been presenting information on monthly basic needs for an average family of five to six.
JCTR attributed the increase in the cost of living, last month, to a rise in prices of some food items.
The new increments are bound to make things even worse.
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Source: Africafeeds.com
