STATE MUST THINK OF POOR WHEN REMOVING SUBSIDIES - STUDY

By MAILESI BANDA FUTURE decisions to remove subsidies should be made after conducting studies and deliberating on the effects of the removal especially on the poor.

According to a research report on, how the 2016 fuel subsidy removal affected transport consumption and consumers conducted by the Zambia Institute of Policy Analysis and Research and the Consumer Trust Society International, the decision has negatively affected the poor.

The report notes that the subsidies removed and the subsequent electricity increased prices affected the economy through increased costs of transportation in rural and the urban areas, adding that this included those using private and public vehicles.

According to the people interviewed for the study, the removal of the subsidies reduced their consumption power as much of the money was being directed to their transport.

The respondents said they could neither reduce nor increase the number of trips but had to maintain their consumption by bearing the higher costs of transportation.

They said they had to shift expenditure meant for basic needs to transport for them to meet the increased cost of transportation.

The report suggests that to cushion the effects of the increased costs emanating from the removing of the subsidies, there was need to allocate more resources towards well targeted social safety nets.

It also reported that there was need to enhance the social cash transfer and increase the number of beneficiaries and increase the amount in order to help the poor handle the challenges arising from the removal of subsidies.