ZAMBIAN businesses including industries must employ new ideas and strategies to strengthen their operations to avoid shutting down due to galloping inflation, the Private Sector and Development Association (PSDA) disclosed yesterday.
Chairperson Yusuf Dodia said in an interview that the increase in inflation rate from 14.3 per cent for the month of October to 19.5 per cent in November meant that businesses had to adjust their operations.
He said local industries would have to adjust their ways of doing business to avoid closing down because machinery had become expensive.
“A lot of industries will have to re-design how they operate, most manufacturing industries will close down.
“It will only be the trading companies which will survive and that will be a big challenge,” he said.
Mr Dodia said the current high inflation rate would force local businesses to only produce goods that give them profit and avoid those which were the opposite.
“You will find that companies like Zambeef will start reducing production because they will choose where they are making money and close those outlets from which they are making losses.
“This means that one has to do that which is going to make the economy adjust,” he said.
He also said it was expected that inflation would go up owing to increased prices of food in Zambia.
“This is expected because if you look at prices of food they have gone up by more than 50 percent, meaning the inflation rate on food is between 50 and a 100 percent,” he said.
Mr Dodia said it was only fuel and electricity where inflation was below 50 percent which would be badly affected.
“It’s only areas such as electricity and fuel where the inflation rate is below 50 per cent but some prices of items have gone up most of them above 20 per cent.
“So when they aggregate the 20 per cent, they take all the different factors to 19 to 20 percent,” he said.