The Private Sector Development Association (PSDA) has said the recent fuel hike, coupled with the imminent upward adjustment of electricity tariffs, will impact negatively on investment in the country.
Association chairperson Yusuf Dodia said this was because the cost of doing business is likely to go up in all sectors of the country’s economy.
Mr. Dodia told ZANIS in an interview in Lusaka today that because of these developments, it will be difficult to stimulate the growth of the economy.
“Our biggest worry is that prices of fuel and electricity are going up. This means that the cost of doing business in whatever sector will go up,” he said.
He said the expected rise in the cost of production might cause Zambia to be less competitive than her neighbouring countries as the local products will be more expensive than the imported goods.
Mr. Dodia stated that the increase in fuel prices and electricity tariffs will also impact negatively on consumers as prices of goods and services will most likely go up.
“An increase in the price of fuel means an increase in all prices of goods and services. This is because fuel impacts on everything including bus fares,” he said.
He said the salary increment that government has offered civil servants will not be felt as they will be paying more for goods and services.
Government recently hiked fuel prices by an average of KR1.69 per litre while the Zambia Electricity Supply Corporation (ZESCO) has proposed a 26 percent upward adjustment of electricity tariffs.
And a Lusaka based economist Trevor Simumba has advised government to consult stakeholders each time it wants to effect a new policy.
Mr. Simumba said it was important for government to get the input of various stakeholders on its policy pronouncements so that such policies have the reflection of all interested parties.
He was speaking in an interview with ZANIS in reaction to the recently announced fuel price hike which had been necessitated by government’s decision to remove fuel subsidies on prices of petroleum products.
Mines, Energy and Water Development Minister Yamfwa Mukanga made the announcement recently at a media briefing in Lusaka.
Mr. Simumba said it was imperative that government seeks the input of stakeholders on any major policy announcement.
He said government should have given people chance to give their opinion on the removal of fuel subsidies and the consequent increase in fuel prices so that the final decision had the reflection of all stakeholders.
Mr. Simumba said the removal of fuel subsidies will impact negatively on consumers as the prices of basic commodities will go up.
He said the very poor people that government said were not benefiting from the subsidies will be the same that will feel the pinch of the increase.