PRESIDENT Edgar Lungu has charged that Zambia’s high inflationary rate has been artificially accelerating because of the illegal practice of dollarization by some unscrupulous businesses who have been pricing their merchandise in dollars.
President Lungu has appealed to businesses in the country to immediately stop pricing their commodities in dollars and has directed the Bank of Zambia (BoZ) to ensure enhanced monitoring and take punitive measures against business entities pricing their goods in foreign currency.
President Lungu said despite the appreciable stabilization in the exchange rate, some businesses had continued with the unwarranted practice of pricing their goods in dollars.
At a press conference at State House yesterday, President Lungu the pricing of goods in dollars was not only ‘‘illegal but immoral’’ because the businesses that were in such practices had maintained their dollar prices even when the Kwacha had appreciated.
He said the Zambian economy had recently been facing challenges which had arisen mainly from external and in some cases domestic events.
The President said a slowdown in the economic activities mainly in China and the Eurozone couples with the strengthening of the US dollar had led to a crash in commodity prices and a fall in investment inflows.
The Head of State said copper prices had slumped by 26 percent since the beginning of this year which had led to a fall in production and scaling back of some mining operations.
“Non-Traditional Exports (NTE) earnings have declined by 36.6 percent and on the domestic side, the poor rainfall pattern particularly in the 2014/15 agricultural season has led to the fall in crop production and a severe decline in electricity generation,” President Lungu said.
And President Lungu said failure to adhere to the cost-effective pricing in petroleum procurement has had a negative impact on the Budget and that by the end of the year, Government would have spent in excess of US$3,000 million in subsidizing fuel pump prices.