By Cecilia Chiluba/Zambia/Lusaka
An economist has attributed Zambia’s persistently high cost of living to the slow pace at which businesses are passing on the benefits of economic recovery to ordinary citizens, coupled with low disposable incomes among households.
Although Zambia has recorded positive macroeconomic indicators such as lower inflation and a relatively stable performance of major convertible currencies, the gains have not translated into cheaper goods and services for most people.
Partner Siabutuba noted that government leaders have repeatedly appealed to manufacturers and service providers to reduce prices in line with the improving economic environment.
“Some months ago, the President publicly appealed to manufacturers to transfer the benefits of economic recovery to citizens by making goods and services cheaper,” Siabutuba recalled. “A similar call was later made by the Minister of Commerce and Trade, Mulenga Chipoka.”
Speaking in an interview, Mr. Siabutuba observed that while Zambia operates under a free-market economy where government cannot directly control prices, there is an expectation that businesses benefiting from favorable economic conditions should voluntarily adjust pricing to ease the burden on consumers.
He cited examples from other countries where companies have responded more quickly to improved economic conditions by lowering prices, thereby helping to reduce the overall cost of living.
However, Mr. Siabutuba stressed that pricing is only part of the problem, adding that the second major factor driving the high cost of living is the low disposable income of citizens.
“Even where prices have come down, such as the reduction in the price of mealie meal, many people still find these goods expensive because their incomes remain very low.”
“Affordability is not just about cheaper products; it’s also about the capacity of citizens to buy them,” he said.
He called for broader discussions around wages, taxation, and statutory deductions, arguing that employed citizens are left with too little income after taxes and other obligations.
“So we need to also be talking about how can we ensure that citizens have better pay and we have enough disposable income. We need a conversation around some of the taxes, some of the obligations you and me, who are employed, are supposed to have. So that then we have enough income that can remain at our disposal to spend,” he said
Mr. Siabutuba stated that without improvements in both price adjustments by companies and income levels for citizens, the cost of living is likely to remain a major challenge despite positive economic indicators.
