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BNB Press Release December 2009

BNB Press Release December 2009

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Published by Zambian-Economist

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Published by: Zambian-Economist on Jan 16, 2010
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01/15/2010

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1
PRESS RELEASE 15 October 2009
³2009 CHARACTERISED BY HIGH COST OF LIVING´, JCTR 
 
 As Zambia approached the end of 2009, two issues were prominent on the socio-economic scene: the reductionin poverty levels and annual inflation rate. ³While achieving these targets is fundamental to the improvement of Zambia's economy,´ says Miniva Chibuye, Coordinator of the Social Conditions Programme at
JCTR 
, ³equallyimportant is what this means in terms of benefits for ordinary people´.Linked to this is the need for a thorough analysis of these trends so cardinal for informing future policy directions. According to the recently released Living Conditions Monitoring Survey statistics, the levels of poverty in thecountry have reduced. For example, the rate of extreme poverty has significantly declined from 44.5 percent in1996 to 36.5 percent in 2006. At this rate, Zambia will meet the target for the MDG number one of halving theproportion of people suffering from poverty and hunger by 2015.However, it should be brought to the fore that these statistics exclude the critical period of 2008 and 2009,marked by the fuel, food and economic crises. The compounding effects of these events significantly jeopardisedyears of progress in fighting global poverty. For instance, predictions at the international level were that thenumbers of people living in extreme poverty in 2009 was expected to increase from 55 million to 90 million,higher than what was expected during the pre-global economic crisis era. The full repercussions of the crises areyet to be felt, especially in developing countries.Some of the already known human consequences of the crises worth highlighting include rising unemploymentwith long lasting effects on poverty, hunger and disease. ³With this alarming increase in global poverty coupledwith human consequences, the Government of Zambia cannot afford to be complacent following the recordeddecrease in poverty levels as measured in 2006´, says Ms. Chibuye. Without proper interventions, the progressmade towards reducing poverty will stall with a possibility of reversing the trends. Alongside the continued serious deterioration in living conditions during the year 2009 were efforts on the part of Government to contain inflation and attain the growth target set out at the beginning of the year. While inflationhas reportedly been contained to manageable levels of just below 10 percent, cost of living as revealed by the
JCTR 
 
Basic Needs Basket 
for Lusaka continued to rise for most of the year. Acknowledging that inflation is anindirect cost to the poor through increases in the cost of living, inflation of minimum levels is a fundamentalingredient to poverty reduction. The graphs below indicate the annual trend for both the cost of basic food itemsand essential non-food items in Lusaka.While the
JCTR 
Lusaka
BNB
research recorded reductions in the cost of food in the months of June andOctober, which consequently influenced the total cost of 
BNB
, a general upward trend in prices was observed.Despite some recorded reductions in some months, it should be noted that nominal prices did not reduce to thelevel of December 2008. This trend was also observed in other towns such as Ndola, Kitwe, Livingstone,Kasama, Solwezi, Kabwe, etc.,
680000
700000720000
740000760000780000
800000820000
840000
Cost of Basic Food Items
170000018000001900000
20000002100000
220000023000002400000
Total BNB

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