Dollarisation and inflation killed Zim’s economy
IN my capacity as EAZ President, I have received a lot of queries as to whether it is justified that Zambian business can peg prices of goods and services in the US dollar.
Well to begin with, the exchange rate definitely has an impact on pricing of goods that are imported. When the exchange rate moves against our currency, prices of imported goods will shift upwards. Unfortunately, businesses never adjust downwards prices when the Kwacha appreciates.
There is also an increasing concern where most Zambian businesses have maliciously started pegging their prices in US dollars! Schools for example are writing to parents openly that because of the exchange rate, school fees will shift upwards.
Now when you look at schools, they really do less purchases as most of their fixed costs are labour costs. There is just a malicious trend where schools are owned by foreigners and psychologically they dollar price school fees!
Schools are maliciously increasing school fees and no one is coming to the aid of citizens! Schools are increasing fees but parents’ salaries remain unchanged. Teachers’ salaries also remain stable!
This trend should be clearly monitored by relevant authorities. Some schools are increasing fees by more than K3, 000 as if Albert Einstein is charging for his knowledge!
The other culprits are landlords for offices, shops and houses. It is immoral to adjust upwards rentals without considering the burden on those that are renting!
We are killing businesses and defeating the purpose of forming legal entities as most business people decide to close shop and move to the informal sector!
It is ok to adjust prices of exchange rate sensitive goods but the whole thing has been blown out of this world by merchants wanting to make a kill!
In Turkey, after the fall of their currency, prices of goods and services remained the same and now tourists are flocking into the country because it has become cheap. In Zambia to the contrary since most businesses are foreign owned, merchants continue keeping prices very high! How possible is it that cement prices can move from K80 to K120 for all cement brands? What is
imported in the production of cement? Have employees’ salaries been increased? Why are we sleeping when our economy continues to be broken down into pieces?
When you go into Congo, over 60 percent of what they consume in Katanga is ours. Where is that forex going to?
When I look at prices of goods produced and sold by Zambian businesses, they have remained stable over the years! Farmers have been receiving the same price for their beef and milk over the years but retailers have increased their prices by 100 percent citing exchange rate?
Who is cheating who here? We definitely can’t impose price controls but we can punish businesses for price fixing!
Yes, when the exchange rate deteriorates, you can adjust the pricing based on the increased costs but not use the situation to make more profits! Just like mines, when copper prices increase, these capitalists also declare increased production costs so that they pay less taxes! Zambia sure are we that dull?
Ministry of General Education, Consumer Protection and Competition Commission, Bank of Zambia and other relevant authorities should study trends in pricing by various businesses! Otherwise we shall kill the middle class very soon and Zambia will only remain with a high class and low class!
LUBINDA HAABAZOKA.