Economist Trevor Hambayi has urged the Government to deal with the electricity shortfalls in order to curb the escalation of inflation which has now hit 15.5 percent against the 6-8 target band.
According to Zamstats, the annual inflation for August 2024 increased to 15.5 percent from 15.4 percent recorded in July 2024.
This means that on average, prices of goods and services increased by 15.5 percent between August 2023 and August 2024.
This development was mainly attributed to price movements of food items.
A disaggregation of the annual inflation by province shows that annual inflation during the month under review increased for Eastern (15.6% from15.2%); Lusaka (13.4% from 12.9%); North-western (15.1% from 15.0%) and Western Province (17.6% from 17.5).
Annual inflation decreased for Copperbelt (15.9% from 16.0%); Luapula (14.9% from 15.2%) and Southern Provinces (17.5% from 18.0%). Central and Northern provinces remained the same at 20.5% and 11.5% respectively.
Of the overall 15.5 percent annual inflation, Lusaka province contributed the highest at 3.9 percentage points followed by Copperbelt which contributed 3.3 percentage points.
Central and Southern Provinces contributed 2.1 and 1.8 percentage points respectively while Northwestern province had the lowest contribution of 0.5 percentage points.
Speaking in an exclusive interview with the Zambian Business Times (ZBT) Hambayi echoed that the major contributor to the escalation is the electricity issue and handling it accordingly will pave the way for other market interventions.
“The issue around power generation must be sorted out otherwise we will continue to have an increased cost that is transferred to the ordinary Zambians, nothing else to discuss once we have sorted this out we will begin to look at other economic metrics which is around stabilizing the macroeconomic indicators, inflation and interest rates,” he echoed.
Hambayi stated that Government must ensure there is access to capital by paying back 2.5 billion in outstanding arrears to contractors and suppliers.
