Economist, Kabwita, has ruled out govt subsidies as solution to Zambia’s rising cost of living

An Economist, Noel Kabwita, has suggested that increasing Zambia’s Gross Domestic Product (GDP), not subsidies, was the only sustainable solution to mitigating the country’s rising cost of living.

The Jesuit Centre for Theological Reflection (JCTR), in its latest Basic Needs and Nutrition Basket survey, reported that the cost of living in Zambia had continued to rise, reaching K10,575.

The survey highlighted the growing financial burden on households across the country.

Speaking in a telephone interview on Friday, Kabwita emphasized that GDP growth would allow ordinary Zambians to increase their income levels, providing them with the financial resilience needed to cope with escalating living costs.

He pointed out that other potential solutions might be difficult to implement, especially given the increasing number of people seeking government assistance.

Kabwita expressed concern over government’s shrinking revenues, making it increasingly difficult for the state to provide direct relief.

“The current economic environment, with rising demand for government support, limits the feasibility of other solutions. As revenues decline, the pressure on the government continues to grow,” he explained.

The economist ruled out subsidising the cost of living as a viable option due to the country’s substantial debt burden.

He stressed that the government could not afford to subsidise consumption in its current financial state.

“Subsidising the high cost of living is not an option considering the country’s debt position. The government is unable to sustain such subsidies. Therefore, growing the GDP is the only realistic means to spur economic growth and reduce the cost of living over time,” Kabwita concluded.

With inflation and economic pressures continuing to impact Zambian households, Kabwita’s remarks highlighted the urgency of stimulating growth through strategic investments that boost GDP and, in turn, improve living standards for the population.

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