ERB SHOULD REDUCE FUEL PRICES

A LOT of issues needing attention have arisen in the past one month or so.

Since October 10, 2014 when Finance Minister Alexander Chikwanda presented the 2015 national budget to Parliament, many other issues  have arisen and, therefore, we could not do full justice to the proposed budget.

Within the proposed budget there are many contentious issues which  call for attention but the entire national document was overshadowed by the commemoration of the country's Golden Jubilee.

Presented on October 10, exactly a fortnight before the main Golden  Jubilee celebration on October 24, the proposed budget had to, obviously, be shelved as we focused our attention on the 50-year
commemorations.

Just when we thought we would return to the normal calendar, tragedy struck with the death of President Michael Sata on October 28 2014.

 Definitely, whole the attention had to be shifted to that loss and Policy Analysis had to look Mr Sata's personal economic contribution  to the nation in last week's article as a tribute to him.

In the coming weeks, God permitting, we will focus on some of the remnant issues from the year while also glancing at the 2015 national budget.

We will tackle some of the issues which have arisen in the last one month or so and highlight the contentious provisions of the 2015 proposed national budget.

From the proposed budget we will look at issues like the much-talked about proposed tax regime for the mining sectors to try and evaluate its impact on the mining houses and the entire economy.

We will equally look at some other tax measures which have been proposed, targeting various other sectors.

There are seemingly other hot issues like the government's resolve to address the current imbalance on the annual allocation of resources which is skewed towards consumption through the public service workers emoluments.

Given the requests and queries I have been receiving from the readers on the mooted offloading of some of the government shares in ZCCM - Investment Holding to the public, we will have to revisit the issue soon.

Some readers have been asking as to how they can participate in the imminent acquisition of the shares and many other aspect of the ZCCM - Investment Holding shareholding.

 For instance, Mr John Misumbi wrote to me from the Copperbelt Province on October 29 2014 saying:

 "How does someone like me purchase or acquire shares in listed company like ZCCM-HI or any other company?"

This has to be looked at with other related issues.

The current situation following the death of Mr Sata has also raised various policy issues which need to be tackled.

At an appropriate time, we will, therefore, have to weigh up on whether there is a possibility of economic policy shift in the country and some of the pitfalls we need to avoid.

These and many other issues will definitely draw us towards the end of the year when we will have one or two articles summarising the 2014.

 Before that, however, I would like to focus on the Competition and Consumer Protection Act number 24 of 2010 and how it is being  implemented by the Competition and Consumer Protection Commission.

 *****

 Still on the issue of consumer rights, the oil prices on the international market have been falling for some time now and from about US$115 per barrel in June, 2014, they are now hovering around
$81 per barrel last week.

 In some African countries, like South Africa, the reduction in the wholesale prices of oil has triggered drops in the pump prices of petroleum products, as a ripple effect.

 In Zambia, however, the Energy Regulations Board (ERB) has been quiet on the matter and yet it is supposed to ensure that Zambians also benefit from the falling prices of the essential commodity.

This has led to various alert local consumers through the Zambia Consumer Association (ZACA) to call on the Government to address the issue.

The authorities in Zambia should emulate South Africa where the petrol prices recently decreased by 45 cents a litre with diesel prices lowering by 60 cents for every litre.

This was the second reduction in the prices of these essential commodities following the first one sometime back.

Zambian fuel users need a relief considering that the prices of petroleum products in the country are said to be among the highest in the region, at K10.63 per litre for petrol, K10.01 per litre for
diesel and K7.48 per litre for kerosene.

 For comment call: 0955431442, 0977246099 or email: jmuyanwa@gmail.com.

2013 REVIEW STARTS

AS we move towards the end of 2013, we will, in the next number of weeks, look at some of the highlights of the year in terms of new policies.


We will look at the implementation of these policies and how that will possibly affect the economic sector in 2014 and beyond.

 

Without going into details, I have in mind the rebasing of the Kwacha whose upshots affect all Zambian nationals and residents.

 

 

 

Effective January 1, 2013, Zambia has had a new currency.


Then there is the introduction of the Cheque Truncation System (CTS) for all commercial banks whose implementation, however, seems to have not achieved the desired goals.

 

 

 

There are various policy changes which have been effected through Statutory Instruments (SIs) like number 55 of 2013 as well as the now infamous SI 89 on the export of unprocessed minerals.

 

 

 

We will further relook at some of the notable economic achievements in the year and the challenges like the widened budgetary deficit.

 

 

 

The deficit which was initially planned at 4.3 per cent will rise up to 8.5 per cent by December 31 2013.

 

The review will lead us to the 2014 National Budget where I will draw the readers’ attention to some of the measures espoused in the document.

But that will be after looking at some of the efforts the Bank of Zambia has made to address various monetary challenges in the country, including the high lending interest rates.

 

 

 

 

We will further refocus at the newly-launched Mines and Mineral Development Policy and ascertain its relevancy to the sector.

 

 

 

By the time we look at all these issues, we may well be in time to welcome the beginning of 2014 at which instant Policy Analysis may go on recess while we try to look at its relevancy to you, the readers.

 

 

 

Before going full throttle into the 2013 review, however, I want to attend to unfinished business by featuring an abridged mail from a reader on the toll gate fees.

 

 

 

Bwalya Mutale, a CIMA student writes:

 

 

 

“Dear Muyanwa (Mr)

I hope and trust that my mail finds you well.

I write to make a comment on the on-going toll gate debate in Zambia. First and foremost it is agreeable that this toll gate fees are another increase on the tax burden on the ordinary Zambians.

 

The question that begs for an immediate answer is, is the tollgate tax the only and best method to better roads?

 

I leave it to the Zambians to answer but what is my point?

 

My point is that a quick glance at the Zambian budget shows that a staggering 60 per cent or so of the total budget goes to consumption!

 

If I was the minister of finance, my objective should then be to find creative ways to reduce this trend first before going about in burdening the poor Zambians with more tax.

You see no one can ever develop if they eat more than they invest.

Back to the tollgate tax, no one can deny that through this tax government will raise substantial amounts of revenue which could lead to better roads. But you see our governments have a pedigree of long fingers.

 

Tell me, if tomorrow the doctors took to the streets demanding better salaries that our government will not be tempted to deep their fingers in these same funds!

So you see the problem is financial discipline.

Zambia currently ranks amongst the top in the high cost of living category in the region.

 

Of course this is subject to further debate by experts. So if the tollgate tax is implemented that should push the cost of living higher and so will inflation. This then means the recent salary increments will be wiped out by inflationary pressures.

 

This again will contradict the government’s goal of creating a middle class.

“In my concluding the tollgate fees should just be for bigger automobiles especially those trucks exporting copper which is not even properly taxed while the ordinary cargo should be exempted,” ends Mr Mutale.

Further, in response to my question if there is anything positive about the fees, Mr Mutale writes:

“My desire which I believe is shared by many is to see a better Zambia for all.

 

I do in some way agree that certain strategic roads should be tolled especially those going to the mining regions such as Copperbelt and North-western Provinces.

 

However, to be effective these fees should not go to the central treasury but should be left to develop the respective provinces. In other words the revenue should be ring-fenced as provincial or some other criteria but not centralised.

 

This will mean decentralising the road fund into regions so that the money does not come to Lusaka. This will also be in line with government’s policy of decentralisation.

 

For comments/other contributions call: 0955431442, 0977246099 or e-mail: jmuyanwa@gmail.com.