Subsidy blows for farmers

In order to save Zambia from its economic turmoil, president Edgar Lungu pledged to remove or reduce energy and agricultural subsidies in order to acquire a loan from the IMF to the value of $1,2 billion, his spokesperson, Amos Chanda said.

“The president has promised to move rapidly to either do completely away with subsidies or progressively reduce them,” Chanda said.

These cuts would be a massive blow for agriculture since maize production by small-scale farmers in the country has been massively supported by these subsidies, allowing the country to export large amounts to their neighbours like Zimbabwe and Malawi.

The re-elected president will need to cut the budget deficit that expanded to almost 10 percent of GDP last year, with the country’s economic growth that slowed down to 3 %, the lowest since 1998.

The Zambian kwacha has fallen with 25% against the dollar over the past year, pushing inflation over 20%. The main reason for these losses is mainly due to the national trade deficit and the new monetary policy.

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