Zambia Chamber of Commerce and Industry (ZACCL) says the business community is concerned with the numerous challenges being experienced in the national economy.

In response to a press query, the chamber bemoaned the recent increase in fuel prices, the current load shedding and the depreciation of the Kwacha.

“The Zambia Chamber of Commerce and Industry has bemoaned the recent increase in fuel prices by the Energy Regulation Board (ERB) as effected on 23rd September 2019, the current load-shedding being experienced in the country and the depreciation of the national currency, the Kwacha. The business community is concerned about the numerous challenges being experienced in the national economy and is calling for concerted efforts in curbing these challenges in order to avoid economic collapse,” read the statement.

“The increase in fuel prices will most certainly have a negative effect on industry. Though the 80 ngwee increase on fuel prices does not sound very significant, it will definitely push up the cost of doing business for the industry. It is undisputed that fuel is the catalyst of any economic activity and is a critical production input in all sectors of the economy.”

The Chamber urged government to streamline the fuel procurement process by cutting off middle men and allowing oil marketing companies to import fuel.

“As such, any increase in fuel prices always has a ripple effect on production and the economy as a whole, causing other sectors in turn to hike their prices. Like we have always stated, fuel increase has always been problematic in Zambia because it adds to the cost of doing business, cost of living and generally affects productive activities,” ZACCL urged.

“With this increase, businesses are forced to increase the prices of commodities and services to remain profitable, which will in turn increase inflation which is already slowly inching upwards. In the short-term, we urge that Government should work at streamlining the fuel procurement process by cutting off middle-men and allowing oil marketing companies to import fuel as a finished product and also by reducing the taxes and fees on fuel.”

The chamber said the power shortage could have been avoided if the country heeded to calls to promote private investment into energy.

“Secondly, considering the reason given by the ERB for increasing fuel prices as being the depreciation of the local currency, it calls for scaling up measures to diversify the economy in the long term while the Bank of Zambia puts in place measures to smoothen the depreciation in the short-term,” read the statement

“On the other front, business is currently suffering from the electric power load-shedding which is being experienced in the country. While it is clearly understood that this is partly due to the reduced water levels in our main water reservoir, the Kariba Dam, this situation could have been avoided had the country heeded calls to invest or promote private investment into other energy sources such as solar, wind etc.”

ZACCL urged government to waive duties and other taxes for a limited time on all energy generating equipment and accessories.

“As a short-term measure to invigorate interest and investment, government should ensure to waive duties and other taxes, for a limited time on all energy generating equipment and accessories. We further urge the ERB to introduce Smart Metering to encourage domestic and small scale IPP as well consider banning use of electric geysers with a view to legislate incorporation of solar heaters in all new buildings and eventually replacing all electric geysers,” ZACCL urged.

“These measures have no revenue loss on the part of government and even Zesco as the consumers foot the bills. In the long-term, the country needs to expedite the development of power generation in the Northern circuit by signing off all pending proposed power generating projects while investing and promoting investment into alternative sources of energy.”

The chamber said the current economic situation was posing serious threats to the health of the economy and making business in Zambia uncompetitive.

“The Batoka Gorge Hydro power station development also needs to commence in the last quarter of 2020 as planned. The combined effects of the increase in fuel prices, the current electric power load-shedding and the depreciation of the Kwacha are posing serious threats to the health of economy and are making business and Zambia uncompetitive due to the increase in the cost of doing business and a recipe business slow down, reduced foreign earnings, reduced tax revenues, job losses and increase in poverty levels,” the statement read.

“As matters stand now and if such measures as suggested above are not taken, the country runs the risk of eroding the economic gains that have been achieved so far and the future prospects of the economy.”