Statement of the Socialist Party on the fast deteriorating economic situation
Things seem to be changing very quickly and ceaselessly.
It’s just over a week ago since we shared our concerns, fears, meditations and reflections on the state of our country’s economy and warned that things will get worse by the end of this year. We are now witnessing the increase of the overnight lending rate to a record high of 28 per cent, the monetary policy rate by 125 basis points to 11.50 per cent and the steep depreciation of the kwacha.
In simple terms, this means that nearly all items our people purchase – food, fuel, medicines, agricultural inputs, and so on and so forth will become more expensive. And if they have a loan from a bank or lending institution, their income will decrease.
It means that businesses that have borrowed from banks will have to pay back more than they anticipated.
In short, it means, it will be even harder for money to come by.
The Bank of Zambia has admitted that the increase in both the overnight lending rate and the monetary policy rate are measures “aimed at instilling stability in the market” and “to counter inflationary pressures that include exchange rate”.
And as we advised, the Bank of Zambia has also admitted, that “it recognises that to address the prevailing economic challenges, monetary policy actions alone are not sufficient. They need to be complemented by the implementation of corrective measures”.
It is clear that the Bank of Zambia also recognises that we are in an economic crisis! And it is imperative that our government recognises this and not only takes responsibility for it but quickly implements remedial action.
As we have said before, it takes a little intelligence – if that is all one has – to recognise that continued debt contraction and reckless government spending will make the lives of our people tougher and tougher and more and more unbearable.
Our people, who are already struggling to afford the basics – food, electricity, water, medicines, school fees and so on and so forth deserve a government that governs in their interest. A government that ensures that the basic necessities to live a dignified life are available for all.
Issued by Fred M’membe on behalf of the Central Committee of the Socialist Party
Garden Compound, Lusaka
November 21, 2019