REDUCING tariffs on imported raw materials will be a risk for Government because it will not collect enough revenue to finance some of its debts, says Private Sector Development Association chairperson Yusuf Dodia.
Mr Dodia said that much as manufacturers had been calling on Government to reduce tariffs on imported materials, Government risked losing out revenue to finance its debts and other development projects.
He said it would be difficult for Government to make everything duty free considering that it depended on revenue collected to sustain its operations for the country.
“Manufacturers have been crying that tariffs on imported raw materials need to be reduced so that the sector can be more competitive but at the same time Government has to collect money to finance its obligations so it becomes difficult making everything duty free,” he said.
Meanwhile, Mr Dodia said the rising of inflation from 7.7 percent in September to 14.3 percent in October meant that Zambia was quickly becoming an expensive country to live in.
He was however quick to mention that the rise was not surprising because the Kwacha had been deteriorating.
Mr Dodia said the cost of business in Zambia would go up and it had an impact on local products by making them less competitive compared to imported products from either the region or abroad like China and India.
“It is not a surprise having inflation rising from 7.7 percent to 14.3 percent for October because we have seen the kwacha deteriorate the same way, it was 7 to a dollar and now it is K14 to a dollar.
“That tells us that we expect inflation to be high and of course we are beginning to see the impact of it by prices of food increasing as well as various commodities and this means that Zambians are going to be poorer than they were yesterday,” he said.
Mr Dodia said the buying power of the kwacha had been reduced by more than 50 percent.
“The impact of risen inflation is that Zambia is quickly becoming a very expensive country to live in and it will be less attractive for investors and that is not a very good picture.
“This will now put pressure on employers to increase salaries and wages due to demand which will come from employees because the cost of living and doing business has continued to go up,” he said.