Subsidies for the rich – Chikwanda


ENERGY Forum-Zambia (EFZ) says the removal of subsidies on fuel pump price is justified because consumptive subsidies in Zambia only benefits the well-off in society and has urged government to extend the removal of subsidies to electricity because commercial entities were the ones benefiting and not the ordinally Zambians. EFZ chairperson Johnstone Chikwanda said the Energy Regulation Board (ERB) had evidently that the biggest beneficiary of fuel subsides in Zambia was the commercial sector which overlapped into the retail chain whose fleet refuelled from petrol stations. Mr. Chikwanda said consumptive subsidies had an overall benefit to those who were already well-off which included owners of transnational corporations, stating that unsustainable consumptive subsidies in a country classified as poor were not a panacea to resolving economic challenges. “With regard to fuel consumption pattern, historically it has been industries which consume more although a strange pattern has emerged. National fuel consumption between these two sectors is almost neck on neck but the bigger picture is that industries still consume more fuel. This being the case, it can be deduced that the biggest beneficiary of fuel subsides in Zambia is the commercial sector which also overlaps into the retail since part of its fleet refuel from petrol stations. “This commercial sector includes multinational corporations. Energy Forum Zambia maintains the view that consumptive subsidies have an overall benefit on those who are already well-off which include owners of transnational corporations. Unsustainable consumptive subsidies especially for a country still classified as poor are not a panacea to resolving economic challenges,” Mr. Chikwanda said. He said it was surprising that the same well-to-do people in society were the ones in the forefront objecting such measures in the name of protecting the poor claiming. He said the rich were purporting to be speaking for the poor by claiming that the decimation of consumptive subsidies would suffocate the majority economically underprivileged yet they knew that they were the beneficiaries of such subsidies. Mr Chkwanda however said the Energy Forum took note of some concerns raised by some stakeholders and agreed that there was need to find a way to keep fuel prices low such as engaging in a government to government procurement of petroleum products.   He also said there was need for government to scrap electricity subsidies because they were only benefiting the commercial entities who were the major consumers. He said there was no justification in continuing with electricity subsidies when over 70 percent of households were not connected with household electrification still stark at less than 26 percent. “While there has been some notable improvement in household electrification, Zambia’s household electrification still remain grievously low at less than 26% of national household. Therefore, the biggest beneficiary of electricity subsidies are the corporations. You can also compare who is well-off between those few households which are connected to electricity with the over 70% households which are not connected,” he said


One thought on “Subsidies for the rich – Chikwanda

  1. How many subsidies are you going to remove? when kambwili quarreled with Frank Bwalya on a radio phoenix programme he was defending the removal subsidies on fuel in 2012/13 on which he said the Govt saved three trillion . so when was they reintroduced to be removed today?

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