Politicised Economy Behind Price Rises, Claims Banda

Andrew Banda has criticised the politicisation of the economy under the PF, citing the fuel sector, fertiliser and seed import and supply as examples.

Banda is among those to have spoken out after Energy Minister Mathews Nkhuwa earlier this month told Zambians they should expect an increase in fuel prices following the depreciation of the Kwacha. The currency has dropped 21% in 2019, making it the world’s third-worst performing currency this year.

Fuel prices previously increased in September, when the Energy Regulation Board confirmed an average price rise for diesel and petrol of K0.80.

UPND Hakinde Hichilema has also spoken out against the plans, warning of the impact on businesses and citizens.

“We arrived at this economic crisis because we have depleted the foreign reserves that were being used to cushion the weakening currency. We warned the PF against excessive borrowing which has now led us into huge debt repayment situation,” Hichilema stated.

Debt could reach $11.4bn in 2019, according to IMF estimates. This is up from $10bn in 2018 and just $1.9bn in 2011. Debt servicing is expected to have cost $800mn this year, of which $300mn is servicing the Eurobonds. 

Both Banda and the UPND have claimed that the use of middlemen by the PF has greatly increased the costs for Government in the power sector and beyond, increasing debt and leaving ordinary citizens to pay the bill through continual price rises.

The Government contracted the Eurobonds in order to invest in infrastructure such as the power sector. 

“We further owe $750 million in Eurobonds which was meant to mitigate shortage of power and many other issues, but that too can’t be accounted for,” Banda has stated. 

He also claimed that in Malawi and most SADC countries fuel is cheaper than in Zambia.

The UPND have pledged to lower fuel prices through the suspension of excise duty and the cancellation of dealer margins, among other measures.