ZAMBIA’S annual rate of inflation at 21.8 per cent will continue to increase the cost of living and push more citizens into a poverty trap, warns the Civil Society for Poverty Reduction.
The country’s inflation rate marginally dropped to 21.8 per cent in April from 22.2 per cent in March, mainly driven by a decrease in prices of electricity and fuel, while essential commodities like mealie-meal saw a jump.
According to the Central Statistical Office, of the 21.8 per cent annual inflation rate recorded last month, food and non-alcoholic beverage products accounted for 13.7 percentage points, while non-food products contributed 8.1 percentage points.
But CSPR executive director Patrick Nshindano said the marginal decline in inflation will, however, continue to increase the cost of living and put more pressure on the majority poor Zambians.
“The marginal decline by 0.4 per cent has to be put in context; if you look at the essential food items, those still remain very high in this country. We have a huge disparity in our society where we have a lot of people living in poverty who cannot be able to afford. Inflation is an indirect tax; it erodes one’s income indirectly because your purchasing power is eroded,” Nshindano said in an interview.
“Those in the lower income bracket who happen to be in the majority do not have the ability to safeguard their incomes or assets against inflation. So, it pushes people further into that poverty trap.”
He explained that the levels of inequality, as highlighted by the CSO’s 2015 Living Conditions and Monitoring Survey, will also worsen as a result of double-digit inflation.
“Also, if you compare the level of people living in poverty; the 2015 LCMS indicated about 40.8 per cent of Zambians are still living in extreme poverty. What that does, combined with the double inflation rate, is that it puts a huge burden on that large pool of individuals,” added Nshindano.
“Currently, the poverty levels are increasing. The LCMS has indicated that it has dropped marginally at national level, but there is a huge disparity between rural and urban; rural poverty has actually gone up. What that tells you is that we have a very huge problem, especially with inequality.”