New Monetary Policy in Zambia Likely to Worsen Living Conditions, Jesuit Scholars Say

They explain that the MPR may increase poverty levels because of some of its trickle-down effects including the extended periods to repay loans or increase in the monthly repayment of loans to banks.

“The expected unemployment as a result of an increased MPR would worsen the socio-economic context of recent years that has been characterized by contracted growth and eventually a recession on account of COVID-19,” JCTR officials say.

They add that “a 2019 study using micro level labor force survey data does indicate that an increase in the Bank of Zambia policy rate increases unemployment.”

“This negativity impacts the availability and cost of credit in the economy which makes it more difficult for the private sector to expand and create more jobs,” say officials at the institution that was founded by the Jesuits of the Zambia-Malawi Province in 1988.

In the Basic Needs and Nutrition Basket (BNNB) report that stipulates Zambia’s cost of living for November, JCTR officials emphasize the need for the government to guard the nation against increases in the indicators of the current trends in the economy (macroeconomic variables).

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They say the macroeconomic variables such as inflation “erode the disposable incomes of households in the long run thereby compromising living standards.”

“Economic growth remains essential to seeing the much-needed government revenue and job creation,” the Jesuit scholars say in their December 15 statement. 

For this reason, JCTR officials call on the government of Zambia to actualize social protection interventions set out in the 2022 national budget to cushion Zambians “so that poverty does not worsen in view of the expected increase in unemployment.”

They also urge the government to take “pro-poor policies” in view of uplifting the living standards and conditions of the marginalized, the vulnerable, and the less fortunate citizens. 

“Therefore, JCTR implores the government to promulgate pro-poor policies, especially those which will reduce the cost of living, promote the common good and preserve human dignity,” say the Jesuit scholars.

This story was first published by ACI Africa on 16 December 2021

Magdalene Kahiu is a Kenyan journalist with passion in Church communication. She holds a Degree in Social Communications from the Catholic University of Eastern Africa (CUEA). Currently, she works as a journalist for ACI Africa.