GOVERNMENT must initiate long-term strategies to address the current economic challenges instead of relying on temporal measures to tackle the crisis, the Jesuit Centre for Theological Reflection has said.
JCTR media and information officer Tendai Posiana said the Government should combine well its policy response to the current economic situation and ‘‘not always trying to find quick fixes’’.
“Recently Government offloaded its reserves on the market to protect the Kwacha from further depreciation but the Kwacha continues to depreciate,” she said.
Ms Posiana said while those measures may yield temporal relief by way of dealing with the symptom of the problem and not the cause, Government still needed to look at the bigger picture by devising long term solutions such as diversifying the economy.
She said raising the interest rates did not seem to be a good recipe for this long term approach to addressing the country’s current economic challenges compared to improving value addition and growing the manufacturing industry.
Ms Posiana said increased interest rates amid rising inflation were a source of worry owing to the escalating commodity prices, most of which have more than doubled.
“The Central Statistical Office in its October press release announced an increase in inflation of 6.6 percentage points, where the October inflation of 14.3 percent is almost double the September inflation of 7.7 percent, and had been blamed on the depreciation of the Kwacha,” she said.
According to the JCTR, the October Basic Needs Basket for a family of five living in Lusaka exhibited a similar trend reflecting an increase of K302.1 from K3, 957.46 in September to K4, 249.56, with a rise of over 16.8 percent increase.
“This development is of great concern especially that the depreciation of the Kwacha continues unabated,” she said.
Ms Posiana also noted that the continued deficit in energy supply and the resultant decline in productivity would make recovery in the cost of living even more difficult.