The reduction in fuel prices has not fully resulted into a reduction in the cost of living due to the vulnerability of the kwacha, says an economic expert Joel Lungu
Mr Lungu said the cost of living has kept rising with high transportation and electricity tariffs for domestic consumers who were affected at the end of each passing day.
“When there is an increase affecting the manufacturers’ cost of production and on account of the increase in the cost of production, the manufacturers will transfer the cost to consumers who are feeling the impact,” he said.
He said the depreciation of kwacha had attributed to the hike in essential commodities, saying such factors had accounted for increased cost of living.
Mr Lungu called for consistency and adherence to set socio-economic targets in the nation’s 2015 budget to prevent major disruptions and any subsequent adverse effects in the economy.
He said the country was still overwhelmed by an increase in the prices of essential commodities, especially mealie meal which was Zambia’s staple food for the majority.
Mr Lungu said small-scale farmers who were drivers of the economy experienced a lot of challenges in the marketing and selling of the commodity, saying those that sold their maize to the Food Reserve Agency had to wait for a long time to receive their dues.
He said there was need to seek lasting solutions to the many challenges affecting small-scale farmers if household food security was to become a reality and translated into affordable cost of living for the majority.
Mr Lungu explained that the depreciation of kwacha against major currencies last year adversely affected the country’s macroeconomic sector.
Mr Lungu said the adverse events saw the depreciation of kwacha against the major currencies to as low as K7 against the dollar in the first and second quarter of 2014.