Letters - Neoliberalism, Inflation

Zambia's economic 'boom'
By Eugine
Thursday May 29, 2008 [04:00]

I have deliberately chosen to ignore what some economists preach about Zambia's good economic performance largely because to me, it does not translate into anything tangible. They say the kwacha is doing well against the US dollar, that our economy is doing fine (according to Chibamba Kanyama), that the political situation is stable (thanks to some reconciliation at higher level), the copper prices are good, and so on and so forth.

However, what I need these economists or anyone who understands these things to tell me is, with all these indicators, why would the price of a 2kg packet of sugar suddenly shoot up to K18,000, a 25kg bag of mealie-meal fetch K50,000? Why do we still have no cement on our market? Why would the price of stock feed go up in a country that has given priority to agriculture?

I will leave Rhodnie Sisala and Zesco's load shedding out of this for the time being. Why should all these and many other things be happening when we are told that Zambia's economy is doing well? The 5-6 per cent economic growth does not mean anything if my houseboy can't afford basic needs. What is going on? Somebody please explain!

This reminds me of Animal Farm. At some point in the book, the author, George Orwell, tells us how some inspectors went to the farm and were shown how full the food bins/barns were yet, in actual fact, there was sand underneath the food. The figures given were mere statistics while the animals kept starving. Is this what is happening in our country or am I misguided?

I would like to believe that our country is doing fine. But I would love it if our people enjoyed the economic boom.


http://www.postzambia.com/post-read_article.php?articleId=42145

High fuel prices
By Waziona Nkhwekwe Chirwa, Chongwe
Thursday May 29, 2008 [04:00]

Fuel is the lifeblood of any economy and without it, nothing or very little, will happen. The cost of fuel has a direct impact on the cost of other goods and services. It is for this reason that the government should do everything possible to reduce the rising fuel prices in the country.

I was delighted by the government's recent call for a probe into the high fuel prices by the Secretary to the Treasury, Evans Chibiliti. Though the probe is over 40 years behind schedule, it is nevertheless welcome.

It is a notorious fact that one of the major causes of Zambia having one of the most expensive fuel in the world are the heavy taxes levied on our fuel. The taxes applicable to petroleum products in Zambia include import duty, Value Added Tax (VAT) and excise duty.

Import duty at 5 per cent is charged both on petroleum feed stock (crude oil) and refined petroleum products that are imported in the country while excise duty is charged on fuel whether imported or produced locally. The following rates apply: (i) Petrol 60 per cent (ii) diesel 30 per cent.

In addition to the above very high excise duty on fuel, an additional 16 per cent Value Added Tax (VAT) is heaped on the fragile back of our fuel in Zambia.

As our able and competent Secretary to the Treasury constitutes the team to conduct a probe on why fuel prices are high in Zambia, he will do well to critically and honestly reflect on the impact of these clearly exorbitant taxes have on our fuel in Zambia .