THE Jesuit Centre for Theological Reflection (JCTR) says the reality of living a dignified life in Zambia is still far from being attained given the high cost of living, which remains above household average incomes.
And JCTR says the Ministry of Finance’s suggested interventions to stimulate economic recovery and build resilience to safeguard livelihoods and protect the vulnerable are contradictory as far as addressing key macroeconomic issues is concerned.
In a statement, Tuesday, the JCTR stated that while Zambia’s poverty reduction efforts had not yielded considerable results, especially for the rural population, COVID-19 had pushed the masses into a poverty trap.
“On Friday September 25, 2020, the Minister of Finance presented the 2021 national budget to Parliament dubbed: ‘stimulate economic recovery and build resilience to safeguard livelihoods and protect the vulnerable.’ The JCTR acknowledges the timeliness of this theme given the challenging context in which the budget is unveiled. With the onset of a global pandemic, Zambia’s economic performance worsened, thereby, compromising livelihoods, particularly for the most vulnerable. Undoubtedly, while Zambia’s poverty reduction efforts have not yielded considerable results, especially for the rural population, COVID-19 has pushed many more individuals into a poverty trap,” the JCTR stated.
And although its September Basic Needs and Nutrition Basket (BNNB) recorded a slight reduction in prices of goods and services, the Centre observed that the escalating cost of living had far exceeded average incomes.
“The Centre notes the increased allocation to social protection in the 2021 budget and the revision of the tax exemption threshold for Pay-As-You-Earn from K3,300 to K4,000. The JCTR, however, cautions that the reality of living a dignified life is still far from attainable given the high cost of living whose cost level is significantly above household average incomes. The Centre is also cautious that Zambia’s debt is compounding government’s fiscal space to effectively respond to providing the much needed sustainability towards improved livelihoods beyond 2020,” JCTR stated.
It outlined that various price reductions were recorded for food items last month.
“The JCTR’s BNNB for the month of September, 2020, stood at K7,071.37, a reduction of K106.85 compared to K7,178.22 recorded in August. The slight reduction is mainly due to reductions in the prices of some food items such as vegetables, which reduced from K493.39 to K413.96 for 40kg. The price of kapenta reduced from K301.21 to K231.62 per kilogramme. The cost of tomatoes reduced from K62.19 in August to K51.26 per 6kg, while the price of onion reduced from K51.42 to K41.10 per 4kg. The cost of rice reduced from K99.99 to K90.48 per 4kg, representing a reduction of K9.51,” the statement read.
“Other notable reductions were in cassava flour, sweet and Irish potatoes, eggs, including prices of non-food but essential items, such as bath soap and Vaseline. The reduction in some food items can be attributed to the harvest season for items, such as vegetables, potatoes, cassava flour, pounded groundnuts, onion and tomatoes. However, there were notable increases in the prices of food items such as bananas, which went up from KK142.17 to K181.66 per 16kg. Other fruits also saw an increase from K244.33 to K261.19. Other slight increases were on food items such as mealie meal, cooking oil, salt and tea. Notable slight increases on non-food items were also observed such as lotion which increased from K16.77 to K25.43. Other increases were on toilet paper, sanitary towels, charcoal and wash soap.”
And the JCTR added that government’s suggested interventions to stimulate economic recovery and build resilience to safeguard people’s livelihoods were contradictory in addressing key macroeconomic issues due to the resultant widening fiscal deficit, which delayed full recovery.
“Overall, the suggested interventions to stimulate economic recovery and build resilience to safeguard livelihoods and protect the vulnerable are somewhat contradictory as far as addressing key macroeconomic issues. The scenario of a widening fiscal deficit, inflation that has been on the rise in recent times, kwacha depreciating by over 41 per cent as at September, 2020, constrained domestic resource mobilisation and indeed the weakened stimulation of the domestic economy presents a gloomy picture,” the JCTR stated.
It further noted that government’s promise to increase power generation had not reduced load shedding.
“More so, the promises of increased energy generation have not yielded significant reduction in load shedding. High fuel costs and grave hours of load shedding have continued to disrupt businesses and impact negatively on costs and levels of production and consequently economic growth. The JCTR, therefore, calls on government to urgently provide a clear road map outlining the wide range of policy proposals that will be used to reduce inflation to the desired target of 6-8 per cent. We urge government to ensure the realisation of increased energy generation beyond mere promises. The JCTR further reiterates the need for rapid interventions that speak towards the agenda of decent employment creation in line with Seventh National Development Plan aspirations,” stated JCTR.