EFF leader, Mwenda, fears job cuts, cautions on the need to balance fight against inflation with employment creation

Economic Freedom Fighters (EFF) has expressed concerns about the recent decision made by Bank of Zambia (BoZ) to raise lending rates.

On Wednesday, the Central Bank raised its benchmark lending rate by 50 basis points to 10 percent, citing increasing inflation that was expected to remain high.

EFF leader, Kasonde Mwenda, said in a statement issued in Lusaka on Thursday that the decision posed a significant threat to both employment and economic growth.

Mwenda said this marked the third time this year that the Central Bank had raised its key rate in an effort to control inflation, which rose to 10.3 percent year-on-year in July.

He said Inflation was projected to average 10.2 percent in 2023, well above the target range of six percent to eight percent.

“While the intention of addressing inflation is understandable, the consequences of this misguided policy could be devastating,” Mwenda said.

He said the increase in lending rates imposed by the Bank of Zambia would lead to a decline in consumer and business spending, resulting in reduced demand for goods and services.

“Consequently, businesses are likely to face significant revenue losses, which may lead to extensive job cuts.
This is particularly concerning given Zambia’s sizable youth population,” Mwenda said.

He said it was essential to prioritize the preservation of employment opportunities for the youth, as they are vital to the strength and prosperity of our economy.

Mwenda called on the government to take immediate action to rectify this policy that would hinder economic growth and job creation.

“While controlling inflation is important, it should not be pursued at the expense of long-term economic development,” he said.

Mwenda said government needs to implement forward-thinking fiscal policies that prioritize investment in areas such as manufacturing, skills development, and entrepreneurship that specifically benefit the youth.

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