Lusaka, January 7, 2020
On Monday, 6th January, the Road Transport and Safety Agency (RTSA) and Bus and Taxi Owners Association of Zambia (BTOAZ) resolved to increase bus fares.
This decision was due to the increase in the fuel pump price by the ERB on 26 December and as was to be expected, the bus companies are seeking to pass the the increase in costs of operating to consumers.
In 2017, the Consumer Unity and Trust Society (CUTS) and the Zambia Institute for Policy Analysis and Research (ZIPAR) undertook a study entitled “No Such thing as a Painless Wean.” The study looked at how the 2016 fuel price increase affected transport consumption and consumers’ coping strategies.
Following an increase in the cost of transportation the report indicated that the majority of all respondents at all income levels shifted their expenditure from basic needs towards transport. A few resorted to cheaper modes of transport as coping strategies however in large part, 60 percent of respondents said that they had to cut expenditure on
basic needs such as health, education and food as a way of coping with the increased cost of transportation. We anticipate that this is how most consumers will respond to this most recent hike.
There is a need for the government to indicate how it will seek to cushion the effects of increased costs emanating from the energy price hikes on the poor. One of the key ways this can be done is by allocate more resources towards well-targeted social safety nets that have high coverage of poor households and little leakage to non-profit households.
While indeed the country is going through a difficult economic time, resources towards social protection must be ring-fenced in order to protect those most vulnerable. The country’s large growing debt burden is resulting in the government needing to redirect resources from critical sectors of the economy towards debt interest payments yet we still are yet to recieve a concrete plan of action on how the government will seek to address this issue.
Consumers are already feeling the brunt of the country’s economic situation and this price hike will indeed only worsen the current situation. With inflation at 11.7%, the price of goods and services are increasing at a rate that is increasingly becoming untenable for consumers. This combined with the increase in the price of electricity tariffs this will likely only increase the country’s inflation rate and result into more people falling into poverty.
Kindly quote Ms Chenai Mukumba, CUTS Centre Coordinator
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