ZAMBIANS MUST BRACE FOR HARD TIMES

BRACE FOR HARD TIMES

The current economic climate in the country is indicative of hard times to come. Although, politicians were boasting of reductions in fuel and mealie-meal prices being indicative of a working government, it is clear , at least to me, that the boasting is highly misplaced. Why do I say so? First of all the reduction in fuel is a matter of course because the global price for the commodity drastically plummeted to about $ 40 per barrel. With such a reduction on the world market, we all expected the pump price to reduce. It would have been morally wrong to maintain high pump price under the circumstance. Secondly, the high price of meali-meal was the ruling Party’s own making. How? During the run up to the last presidential bye-election, ruling party increased the maize floor price through Food Reserve Agency to please farmers. The farmers were happy to make more money. Did they expect the price of mealie-meal to remain the same with an increase in maize floor price? That would have been ridiculous! With the euphoria of elections gone, government was now faced with the reality: high mealie-meal price- caught up in their own web! So the only solution for them to escape the wrath of the citizens was to release maize at lower price through the FRA. Do you call this success when a man is simply sorting out the messy he has created?

The dark cloud that hangs over the mining industry will have serious ripple effects. Do not think it will just affect the employees in the mining industry. Take for instance, the closure of Luanshya Mines Plc that has left almost 1,500 workers in the cold. The government has lost a lot of revenue it expected to collect in form of corporate tax and pay as you earn, not just from LCM but also from the contractors that were doing business with LCM. If each employee was contributing an average of one million kwacha in form of PAYE, then government has lost an anticipated monthly contribution of K1.5 billion! The banks that gave out loans to LCM employees have also lost out. There will be a reduction in bank deposits ,in due course. The buying power in Luanshya will reduce and so there will be less spending and this will affect shop owners.

The suspension of operations by Zambian Airways is another case in point. This is not just about an airline suspending its operations. Whatever revenue the government , through its agencies, was collecting from the airline and its employees will be no more.
Even though one minister is quoted to have said the suspension will not largely affect the tourism industry, I think that such a statement amounts to burying the head in the sand!
With the aforesaid, governments revenue from local resources this year will definitely be reduced. And this is where the hard times will set in! Prophet of doom? No. We must begin tightening our belts before another does it! I am wondering what will happen to PAYE and the other government levies in this year's budget. I am waiting to see what Dr Musokotwane’s budget will unveil under the circumstances. A chain reaction is surely coming!