Zambia’s inflation accelerated to 10.2 percent year-on-year in March on higher food and travel costs, from 9.8 percent the previous month, the Central Statistical Office said on Thursday.
“The increase of 0.4 percentage points in the annual inflation rate in March 2010 was attributed to … food products and public transport,” the CSO said.
Chibanda Kanyama, an economist with Zambia Breweries, said inflationary pressure may build, partly due to a firm South African rand, but it should retreat to single digits by year-end on an expected good harvest.
“The major threat is the strengthening of the South African rand. Zambia imports a lot from South Africa and the strengthening of the rand means importers will spend more and that cost will be passed on to consumers,” he said.
“(But) we will definitely achieve single-digit inflation by the end of the year because fuel will not be a factor, I don’t see another fuel price hike.”
The rand firmed nearly 30 percent against the dollar last year and has remained relatively strong in 2010, gaining slightly on the Zambian kwacha.
Zambia raised fuel prices by 15 percent in January.
The CSO also said that the trade account showed a surplus of 391 billion kwacha in February compared with a 316.6 billion kwacha surplus in January.
[Reuters]
So how does this information translates to an average villager in nabwalya or shangombo ?:-?
As for me i knew this would happen, to have a single digi at the end of last year and begining of this year in the first quarter is just political. To show people that they are working yet not. One can tell the the single digit was not real growth, from the way the Zambian economy is going, the fuel hike of about 15%, even by the hike of fuel it immediately makes inflation double digit since it was already around the 9% mark.Then the other is the currency value was already around above K5000 to $1 USD. Then tax collection is reduced from the previous that boosted the economy the windfall taxes which was abolished.With government having less revenue means also less money in foreign reserves.All these affect inflation rate it cant remain single digit.They same trick will be done at year end
At the end of this year in the last quarter they will play around with digits to show as if the inflation rate is single digit. So that they will keep saying “last year we closed at a single digit of inflation” Then as we go to the mid year about the second quarter they will bring in things like the London company that was supplying fuel made us loose money as we paid out more. so it has affected the economy so we are looking for other bidders to take it up. All temporal solution to benefit certain individuals. and Trying to show people outside that they are working yet the people they are lying to know economics.
#2,& #3 Red Card, Are we Zambians incapable of considering matters without a political agenda. Are all of us going to be politicians (All Chiefs, no Indians). Societies do not only make progress from politicians. Progress comes from educators, entrepreneurs, engineers, poets, philosophers, farmers. We do not have to see everthing, through political lenses and fail to be objective. This situation in Zambia only points to a failed society, where every one wants to be a politician. Please Red Card give us some educated economic arguments, not your cheap political sentiments.
Red card’s paranoia about the MMD is very evident in his posting.
Because RBs government is double careless
What do the opposition parties say about these figures besides ‘you cant eat inflation’? What do they propose so that inflation can be brought further down? Who is the PACT’s spokesperson on economic affairs?
Where are the PACT technocrats to explain this successful hold on a free fall for both Inflation and the Rate of Exchange? Surely there is something this MMD Govt is doing right!!!!! Donor confidence is at its highest! Soon the floodgates of money will be poured into our economy and the ZMK will be trading at slightly less than 3,800 to the USD. Wait a minute what happens to the collections at ZRA from imports taxes! And then the NGOs CEOs who have pegged the salaries to the USD? Reduced earnings. Maybe that is why they are crying for the PACT to become govt. so that their emoluments will sky rocket as the ZMK will hit 8,000 against the USD. Good job GRZ, there is so much stability in this economy!
It does’nt make any sense about these your figures. Give people food, shelter, health, and education and talk about these your figures to your learned collegues alone cause they seem to understand your ideas.
#4 RECYCLED POLITICIAN the thing is when RB does well for me i comment very well also. But generally if you look at the way the current administration is working there are very little good results. The is only one person who seems to be doing fine and its Felix Mutati.And a few other who try to be objective yet the government doesn’t want to listen. If you looked at LPM reign he listen to the people and worked hard. But with RB Administration you can see it even in the figures that they don’t have a heart for the people but themselves.If they are to Change the attitude i would support them. In order to have development we need good policies, without good policies and good governance no progress or little progress. I would rather have new people or Put Mutati as President it will work.
So in order for Engineers, entrepreneurs and others to yeild good results the need good economic policies and a well government government that will help them too to expand their businesses as well as diversify. But if policies are not in their favour how do we expect change. And if we don’t get good taxes from investors especially foreign investors like the wind fall tax we don’t expect the country to be soon self sufficient, Zambia will always be begging from Donors. Instead of collecting that money and investing in the country and in its people. Will be making sure that Zambia is reaching its potentials. Not all the time being the bottom. when you ask why is Botswana beta developed people say its diamonds, South Africa its gold Zambia they say we don’t have anything. yet we have…
Lets learn also from our friends look at Australia miners get paid atleast $50 an hour and they work atleast 12hours in a day. And among these are also copper mines and they sell their copper to China the same destination as Zambia. And they pay higher taxes. In Zambia a miner is paid between $300-$500 for a Zambian per month a foreigner doing the same job with a zambian in Zambia e.g like those from india.are paid $6000 per month. Is there fairness there. 1. the australian mines are getting about the same amount with Zambia and people benefit same salary where foreigner or local. when you calculate the 12hours per day $50 times 21 days which they work people dont complain its good money.And the country develops.Chinese owned mines in australia operate the same too as locals.we can do same
And don’t get me wrong on the example i have given on the indians and chinese am in support for them to be in our country. Personally i would encourage them to stay there. To bring there ideas and let them mix get married to locals for those who want. those also who want to marry their own can marry their own those married can come with their children. I would encourage that China decongest some Chinese to Zambia, at least if Zambia can take in even 10 million Chinese it would be good but they should all become citizens.Making it more multicultural.Chinese are good people.when they are citizens of Zambia they would send less money to china and would contribute to develop Zambia, as they would want to build their future.
According to the economist, this is due to external factors i.e the rand gaining in value. Even though that i the case, inflating gaining from 9.8% to 10.2% is manageable. I too expect inflation will move back into single digits since the ZMK is expected to gain strength against the USD.
As for the trade surplus, well done. This will surely rake in more USD.
What caused this inflation is the 15% fuel hike announced earlier this year,nothing else, resulting in increments in prices of transportation and foodstuffs, which started to have effects in February 2010.and this hike was neccessitated due to the fact that indeni closed up and there was a govt gazzett that was signed to waive some of the tax so that OMC’s (oil marketing companies) can bring in stocks without any delays,someone had to pay for that and its the consumer
The only way we are going to go back to single digits is if we increase exports,and for the kwacha to stand strong and stable against the green buck,at the moment we are importing more than we are exporting and the strengthening of the rand means we will pay more for imports from Joburg according to chibamba kanyama
On another note,the re-opening of the 200-250 tonne agro-processing plant will boost zambia’s exports.
It will process baked beans, peanut butter, pineapple chunks and fresh fish mainly for export to South Africa, Zimbabwe and the Democratic Republic of Congo (DRC).
This story was posted for Mr Capitalist who screamed black and blue that Zambia was doing good going under a fake marker of 10% inflation.
Well Well Well.
Selling the country for peanuts will not make you dollars.
You only get PEANUTS like RUPIAH and Co.
Australia will not let the Chinese abuse our workers or workplace safety systems.
This is the problem for Zambia.
Abuses by Chinese owned mines is disgraceful to Zambians.
You are the slaves for the Chinese who take everything back home.
They can live on $1 a day as it is their standards back home.
Poor Zambians don’t want to live on a dollar a day.
The most cardinal point is to revive the industrial and manufacturing base in Zambia. The cannery plant that has been established is a good start. We also need much more of the same agro industries to produce products that will compete at the world market. The strength of the kwacha will ensure cheap imported fuels and other factors of production. This will reduce the cost push inflation to single digits. As pointed out earlier, this can only come by diversifying the economy from the unreliable copper economy to more reliable agro and manufacturing economy.
Not surprising, was expected once fuel price went up. Same is happening here in UK. Jut cant be as certain as Chibamba that there will be no further fuel hike in the year. Crude oil prices are still going up, meaning future crude cargos into Indeni will be more expensive – likely to be passed onto customers at filling stations.
I agree the Rand is the big risk when fuel prices are stable. We must begin producing locally some of the stuff we import from RSA. Also we must ensure maize harvest is not wasted so we dont end up importing like was last year. We must drive down imports. Also check wage demands, esp civil service.
Forex – ZMK will strengthen on the back of rising copper prices. This shud favour inflation.
Surprisingly, the trade balances rose by 23%. One would have expected FX inflow from this favourable balance and proberbly strengthen the Kwacha and make factor imports cheap. The opposite is the case. May be all revenue from expots is banked offshore or we are very much into Futures Contracts for our export sales so we cannot see the benefits immediately. Let Chibamba Kanama tell us what is happenning.
#1 good question? If you don’t know ask thats what the presido is lucking. In simple terms to a villager it means you kwacha is buying less.. what K10pin used to buy won’t buy. it means if you have k 500,000 in the bank its loosing value and that a danger. That how you judge the economy of the country. That is why developed nations panic when inflation goes up by a mare .8%. It means alot..When in doulbe digits thats bad.. PF have no capacity to cub this.. Mybe willie sanda could help… we are doomed guys… RB should have continued