Africa-Press – Zambia. An Energy Expert Johnstone Chikwanda has backed the government’s decision to remove subsidies on fuel and electricity in 2022. Mr. Chikwanda says he supports the decision because subsidies at the current size and the rate at which they are expanding will destabilize and cause heavy dislocations to the 2022 national budget performance.
He says the level of subsidies will make rebuilding the economy difficult. Mr. Chikwanda told ZNBC News in an interview that the country will fail to attract major investors in the oil industry if the subsidies are maintained.
He has appealed to different stakeholders to support government reforms in the energy sector as they are well intended and keeping the subsidies is not sustainable.
Meanwhile Center for Trade Policy and Development Executive Director Isaac Mwaipopo said there is need to understand the reason behind the decision to remove subsidies.
He said the decision has been taken because the economy has deteriorated and is performing poorly. Mr. Mwaipopo said it is difficult to sustain the subsidies considering the high level of public debt which has placed a burden on the government to finance.
He said citizens’ concerns are also understood because the cost of production and doing business will rise. Mr. Mwaipopo said it is the considered view of the CTPD that once government restructures the debt, it frees up a bit of resource which can be used to finance some development needs.
He also appealed to the government to consider making reforms regarding access to finance saying most entrepreneurs and private sector players have challenges in accessing cheap finance.
Meanwhile, a Lusaka Resident who is a Welder by profession Saint Silwimba said electricity tariff increment is inevitable. He said the government must have a good reason to remove the subsidies and citizens will see the benefits in the future. Another resident Patrick Phiri however, said the cost of living will likely go up after the removal of subsidies on fuel and electricity.
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