Prices of most goods will go up due to minimum wage- PDSA

THE Zambia Consumers Association (ZACA) and the Private Sector Development Association (PDSA) says more companies are expected to increase prices of goods and services to ease the costs associated to production following the increase in the minimum wage.
Reacting to the recent increase in price of bread by K1, 500 by bakers in Ndola to meet the minimum wage, ZACA executive secretary Muyunda Ililonga says the increase in the price of bread by bakers was justifiable from the economic point of meeting wages.
“We expect more companies to follow suit, Government should have consulted, the end results are that the majority of the business people will pass on the costs to consumers,” he said.
Last week, Labour Minister Fackson Shamenda announced an increase in wages for shopkeepers and domestic workers to a monthly minimum of K1.1 million and K520, 000 respectively.
The minimum wage is a fulfillment of Government’s promise of putting more money in people’s pockets.
But Mr Ililonga has advised the Patriotic Front government to thrive to reduce the high cost of living which saw the previous government pushed out of office.
He said bread is a common food consumed by the majority of Zambians and also given to school going children.
“Although nshima is our sample food, no parent sends their kids to school with nshima,” he said.
He also called on Government to address the existing cartels in the wheat sector which has blossom following the ban on importation of wheat.
Mr Ililonga said millers should be free to import wheat and create competition in the market.
“As consumers association, we see this as anti competition move which has pushed the price of bread up. There is need to lift the ban on wheat so that local producers don’t pass their inefficiencies to consumers,” he said.
He also urged the farmers union to fight for lowering of the cost to doing business in Zambia and not calling for protection of some sector as consumers bare the costs.
He said there is need to create a win-win situation adding that producers should engage Government and address measures that add to the high cost of doing business.
“We are in a liberalised market; we cannot afford to protect our industries…cartels in the wheat sector are a deterrent to consumer welfare,” he said.
In a separate interview, PDSA chairperson Yusuf Dodia said increase in minimum wages directly affects the cost to doing business in Zambia.
Mr Dodia said increase in wages affects productivity of companies adding that in most instances the costs are pushed to consumers.
“There is need to find ways of making our workers skillful so that they are highly paid and not through Government directive. We will soon start seeing the implications of the minimum wages, bread is just the beginning, we are yet to see an increase in security charges as security companies employ a lot of general workers,” he said.

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