CUMULATIVE impact of increased food prices, power tariffs and fuel prices will lead to high cost of living and therefore consumers should be prudent in their spending, the Consumer Unit Trust Society (CUTS) has advised. 

CUTS Centre Coordinator Chenai Mukumba stated that the increase in the price of both electricity and fuel had resulted in increase in the production costs for both goods and services within the economy and advised consumers to mind their spending habits.

She said the expected increase in the cost of living mostly affected the poorest and most marginalised households and therefore the need for the government to provide a tangible solution to cushion low-income consumers in 2020.

Ms. Mukumba stated that following the increase in current electricity tariffs, it anticipated that an estimated 182 000 people will fall into poverty.

“On this basis we can expect that following the increase in the costs of production, producers and retailers will be hiking their prices in 2020 in order to shift the burden of the increased tariff hikes to consumers,” she sated.

Ms. Mukumba said food constitutes a significant proportion of household expenditure, particularly for low-income households and according to research undertaken by her organisation last year, an increase in the cost of food results in most households cutting down on either the number of meals they take or their food portions.

She also stated that according to the Zambia Statistical Agency, the largest contributor to the rising inflation was the increase in the cost of food in December, recorded at 15.2 percent compared to 13.5 percent recorded in November 2019.

“To this end consumers have already begun to see the likes of companies such as Lafarge indicating that they will be increasing their price of cement by 20 percent due to the increase in the prices of fuel and electricity. Further to this, the cost of public transportation has been hiked putting more pressure on the consumers.

Ms. Mukumba said due to the country’s fiscal constraints as a result of the country’s growing debt burden, government should articulate how it was going to address the country’s debt situation which was having negative spillover effect on the lives of Zambians.

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