High Cost of Liv­ing for Zam­bian House­holds per­sisted in 2017 - JCTR

Zambian Business Times - - BUSINESS REVIEW -

The year 2017 can be de­scribed as dis­tress­ing for many house­holds due to high cost of liv­ing.

While prices of com­modi­ties sta­bi­lized com­pared to 2016, the cost of liv­ing re­mained high and beyond the reach of many house­holds as prices of com­modi­ties re­mained high and eco­nomic op­por­tu­ni­ties few. This is ac­cord­ing to a me­dia state­ment is­sued to ZBT by JCTR me­dia Of­fi­cer, Chanda Chileshe.

JCTR Ba­sic Needs Bas­ket re­veals that the na­tional av­er­age cost of liv­ing in­creased from ZMW3, 471 in 2016 to ZMW3, 511 in 2017. This was in tan­dem with the na­tional in­fla­tion which re­mained sta­ble with yearend in­fla­tion of 6.1% in De­cem­ber 2017.

The yearend Ba­sic Needs Bas­ket at De­cem­ber 2017 stood at ZMW 4,958 from ZMW 4,925 in Novem­ber 2017.

Gov­ern­ment pol­icy mea­sures such as re­moval of fuel and elec­tric­ity sub­si­dies which re­sulted in sub­se­quent fuel and elec­tric­ity tar­iff hikes re­spec­tively were ma­jor fac­tors for the high cost of liv­ing.

ZESCO in­creased its tar­iffs by 75% in two phases. The bur­den of this tar­iff ad­just­ment on low in­come house­holds was cush­ioned by non-ap­pli­ca­tion of the tar­iff to the life line units on 200kwh.

Fuel prices in Oc­to­ber 2017 in­creased with petrol go­ing up from ZMW 11.67 to ZMW 12.97, while Diesel from ZMW 9.87 to ZMW 11.09.

Peo­ple’s abil­ity to af­ford the high cost of liv­ing was equally com­pro­mised due to con­tin­ued high un­em­ploy­ment and few eco­nomic op­por­tu­ni­ties.

The large num­ber of min­ing work­ers who were laid off in 2016 at the height of low cop­per prices for in­stance were not all re­turned when cop­per prices re­bounded in 2017.

In the agri­cul­ture sec­tor, farm­ers were of­fered very low maize floor price to en­able them re­coup their farm­ing in­put costs, which were ex­po­nen­tially in­creased by ex­penses to fight army worms and make prof­its to en­able them meet the high cost of liv­ing.

In the busi­ness sec­tor, eco­nomic ac­tiv­i­ties were sub­dued due to low pri­vate sec­tor lend­ing by com­mer­cial banks as lend­ing rates re­mained high and non-per­form­ing loans in­creased.

Fur­ther, JCTR iden­ti­fied in­crease in prices of kapenta, fish, mealie meal and char­coal to be ma­jor fac­tors that con­trib­uted to in­creased cost of liv­ing in 2017 as re­vealed by its Ba­sic Needs Bas­ket.

The prices of kapenta and fish re­mained high through­out the year due to the scarcity of the two com­modi­ties. Prices of char­coal re­mained high be­cause of mar­ket char­coal levy that is paid by traders at the point of sale and in­creased trans­port costs.

At the be­gin­ning of the year mealie meal prices were very high rang­ing be­tween ZMW90 and ZMW100 for a 25 kg bag but af­ter mid-year they re­duced to be­tween ZMW50 and ZMW65 per 25kg bag. The fall in mealie meal prices was in­duced by in­creased sup­ply of maize grain on the mar­ket.

Go­ing for­ward in 2018, JCTR calls on gov­ern­ment to ac­cel­er­ate eco­nomic growth beyond the pro­jected 4.3% for 2018 and en­sure that growth is not just high but eq­ui­table.

This will en­sure re­duc­tion in cost of liv­ing and cre­ation of eco­nomic op­por­tu­ni­ties for ev­ery cit­i­zen es­pe­cially the poor. Peo­ple need to earn an in­come for them to af­ford the ever ris­ing cost of liv­ing.

The 2015 liv­ing con­di­tions mon­i­tor­ing sur­vey monthly av­er­age in­come for house­holds in ru­ral ar­eas was K810 while that of house­holds in ur­ban ar­eas was ZMW3,152. These av­er­age monthly in­comes are not sus­tain­able be­cause they are be­low the av­er­age cost of liv­ing. Fur­ther, the JCTR urges gov­ern­ment to ad­dress the high cost of food and non-food items that form a large share of the Ba­sic Needs Bas­ket and on which or­di­nary peo­ple spend a large share of their in­comes such as fish, kapenta, mealie meal and en­ergy (char­coal).

Gov­ern­ment should for in­stance ac­cel­er­ate devel­op­ment of the aqua­cul­ture sec­tor and re­stock­ing ex­er­cise of fish and kapenta which forms a large com­po­nent of the JCTR’s Ba­sic Needs Bas­ket to re­verse the trend.

This is be­cause fish and kapenta are ba­sic needs and they sig­nif­i­cantly con­tribute to the to­tal amount for cost of liv­ing.

Zam­bia’s fish deficit is re­ported to stand at 55,000m/ton, with the coun­try cur­rently pro­duc­ing 80,000m/tons of fish from rivers and lakes, and 20,000m/tons from aqua­cul­ture al­to­gether, mak­ing 100,000tons in to­tal.

The Catholic funded in­sti­tu­tion fur­ther urges gov­ern­ment to ef­fec­tively im­ple­ment the many agri­cul­tural poli­cies in place in or­der to make agri­cul­ture pro­duc­tive and en­sure food se­cu­rity.

In­creased pro­duc­tion of agri­cul­ture prod­ucts will not only en­sure re­duced agri­cul­tural prod­ucts’ prices such as mealie meal but will also re­sult in in­creased in­comes for farm­ers which will en­hance their ca­pac­ity to meet the high cost of liv­ing.

This can­not be achieved if peren­nial chal­lenges of late de­liv­ery of farm­ing in­puts, late pay­ment of farm­ers who sup­ply their maize to FRA and poor op­er­a­tional­iza­tion of e-voucher cards con­tinue to per­sist.

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