Farmer receives removal of fuel subsidies with mixed feelings

A Lusaka West farmer, Kayola Mbevya, has cautiously welcomed government’s decision to remove fuel subsidises saying the move may have negative effects on the general economy.

And Mr. Mbevya has implored government to formulate policies that will compel financial and other lending institutions to lend money to the productive sector at concessional rates in order to enhance productivity in the country.

Speaking in a telephone interview with the Zambia News and Information Services (ZANIS) in Lusaka today, Mr. Mbevya said although the move was aimed at saving resources that can be channelled to the social sector, there was need for government to undertake a financial forensic audit to determine the benefits.

He observed that the move will also push up prices of commodities and production costs hence making the impact of recent salary increment for already overtaxed public service workers meaningless.

Mr. Mbevya suggested that government should look into the whole fuel value chain and remove distortions that increase fuel prices through a number of middlemen.

He further suggested that government should consider making savings from taxing gratuity that Members of Parliament (MPs) get and other irregular emoluments for a few parastatal heads.

Mr. Mbevya further proposed that allowing the Zambia Electricity Supply Corporation (ZESCO) to increase electricity tariffs coupled with the removal of fuel subsidises will additionally increase the production costs for industries.

He explained that this may cause industrial unrest because workers will demand a pay rise which many companies will fail to pay hence triggering wildcat strikes.

Mr. Mbevya said fuel and electricity were some of the major drivers of the economy hence the need for government to seriously consider subsidizing them using the money made from savings.

Meanwhile, Mr. Mbevya has implored government to formulate policies that will compel financial and other lending institutions to lend money to productive sectors at concessional rates.

He said doing so will enhance productivity in the country.

Mr. Mbevya said the cost of production was already high in Zambia as compared to other neighbouring counties hence government should come up with deliberate polices that will compel financial institutions to offer concessional loans to firms at affordable rates.

He said once companies become competitive, they will greatly help in assisting government to create the much needed employment for young people.

Government recently removed fuel subsidise in order to channel the savings to the construction of schools, hospitals and general improvement of the social sector.