Uneven Geography

The United Nations announced recently some success worldwide in reaching key millennium development goals (MDGs) by the lifting more than one billion people out of extreme poverty. However, a report on 110 counties between 2001-11 released by the Pew Research Centre on the number of people lifted out of poverty since the millennium shows that there has been no real rise in the numbers, constituting the global middle class. What has happened is that around 700 million of the world’s population have moved from living on $2 a day or less to the low-income world of $2-$10 a day.

As part of the MDGs many countries, Zambia included, set their sights on becoming middle income countries. China has been the most successful here with 203 million, moving into a middle-income lifestyle, though 75% of it's population still remain poor or low income. While Asia generally has done best, now having half of the world’s new middle class, jumping from 399 million to 784 million; other parts of Asia were less successful. In India for example while the poverty rate fell from 35% to 20% of the population but its middle-class only grew by 3%.

Other areas that improved were South America, Eastern Europe and Russia; with almost half the South American population now at or above middle-income status, while Europe and North America’s world share of the upper-middle income population fell from 76- 63% over the same period and the US’s proportion of high income population fell from 58-56%

In Africa 92% of the population was either poor or low-income in 2011 and according to the report in Cote d’Ivoire, Kenya, Madagascar and Zambia poverty increased significantly.

In Bhutan, Moldova, Ecuador, Argentina and Kazakhstan the poverty rate fell by at least 15% and the middle class increased by 15%

Factors such as conflict and falling oil and commodity prices have affected the findings for a number of economies, in the past few years, the report notes.

The Jesuit Centre for Theological Reflection has reported that the Kwacha’s fall in value this year is adversely affecting people’s standard of living here in Zambia and the Basic Needs Basket continues to rise in the face of a wage freeze for most of the work-force. It is obviously worse for those relying on casualisation or the informal sector with no steady income. The JCCT surveyed 5 towns in 3 Provinces earlier in the year. Its findings are in the table below.

	Mealie Meal 25kg	Basic Needs Basket	Other Living Costs
Kitwe	K71.40	K2817.00	N/A
Luanshya	K66.33	K2687.00	K1676.00
Mansa	K69.33	K2605.00	K1624.00
Ndola	K69.28	K3670.00	K2400.00
Solwezi	K76.00	K3919.00	K2662.00

 Below is the latest Basic Needs Food Basket published by the JCTR.

JCTR BASIC NEEDS BASKET: LUSAKA
JUNE 2015

(A)  COST OF BASIC FOOD ITEMS FOR A FAMILY OF FIVE IN LUSAKA

Commodity	Kwacha	Quantity	Total Kwacha
Mealie meal (breakfast)	64.57	2 x25kgs	129.14
Beans	18.00	3kgs	54.00
Kapenta (dry)	89.51	2kgs	179.02
Bream (dry)	80.71	1kg	80.71
Beef	32.64	4kgs	130.56
Dark green vegetable	4.43	4kgs	17.72
Tomatoes	6.68	4kgs	26.72
Onion, large	8.20	2kgs	16.40
Cooking oil (2.5L)	36.33	3 litres	43.60
Bread wheat, refined flour, baked	5.64	1 loaf/day	169.20
Sugar	17.90	6kgs	53.70
Mlik (fresh)	5.61	4 x 500mls	22.44
Tea, powder	31.90	1kg	31.90
Eggs	8.93	2 units	17.86
Salt	4.23	1kg	4.23
		Sub total	977.20

 

(B) COST OF ESSENTIAL NON-FOOD ITEM

Charcoal	99.43	2 x 90kgs bags	198.86
Soap (Lifebouy/Champion)	3.71	10 tablets	37.10
Wash soap (Boom)	6.08	4x400g	24.32
Jelly (eg Vaseline)	20.21	1x500mls	20.21
Electricity (medium density – fixed)	372.00		372.00
Water & Sanitation (medium cost – fixed)	325.00		325.00
Housing (medium cost – 3 bedrooms)	1,750.00		1,750.00
		Sub total	2,727.49
		Total for Basic Needs Basket	3,704.69

  

 

C) SOME OTHER ADDITIONAL COSTS
Item K                                                                                                                  Item K
Education Transport                                                                                         (bus fare round trip)
Grades 8-9 (User + PTA/year)         K400.00 – K600.00           Chilenje-Town                       K10.00
Grades 10-12 (User + PTA/year)     K650.00 – K1, 300.00       Chelstone –Town                  K10.00
School Uniform (grades 8-12)          K90.00 – K200.00              Matero-Town                        K10.00

Health (clinic)                                                                               Fuel (cost at the pump)
Registration (book)                           K3.00 - K5.00                    Petrol (per litre)                     K8.74
Self-referral (Emergency Fee)         K 5.500                               Diesel (per litre)                     K7.59
Mosquito Net (private)                      K30.00 – K120.00             Paraffin (per litre)                 K5.40

The June Basic Needs Basket is approximately US$497 based upon the exchange rate of US$7.4491

Some approximate Middle Class Salaries in Government Service: 

General Government Worker                                             K2 300

Enrolled Nurse                                                                      K2 900

Clinical Officer/RGN                                                            K3 300                                                                       

            Senior Teacher Nurse Police Officer                                   K4 000

            Medical Officer                                                                     K17 000

Let there be light!

 

According to the Zambian Economist, Zambia has at present a 560MW power deficit, while demand for electricity is increasing by 200MW each year. Zesco, the parastatal power company, has introduced a timetable of nation-wide rolling power-cuts, called load-shedding here, to try and conserve the water needed to generate electricity till this year’s rains come at the year-end, and hopefully replenish our diminishing water sources. Almost all of Zambia’s electricity is hydro and produced at power stations at the Kariba Dam, Kafue Gorge and Victoria Falls. These low water levels appear to be another consequence of climate change.

 

We received the Mwandi Load Shedding Schedule:

 

Monday           20-24h

Tuesday           15-20h

Wednesday     10-15h

Thursday         05-10h

Friday              24-05h

Saturday          20-24h

Sunday            15-20h

 

If you think that is bad, in Lusaka and other cities the power is off for 8 hours at a stretch. The power has just gone off now for our Tuesday stint! It should come on again hopefully around 20h.

 

There are 2 new power stations due to open this year the 120MW hydro power station at Itezhi-tezi  in August 2015, and the 150MW Maamba Coal Powered Station in November. The most they can do is cover this year’s increased demand. The Government has no financial resources to invest in this area and neighbouring countries face similar problems so there is no spare regional generating capacity that would allow imports to fill the gap. Zesco too is losing revenue from consumers, estimated at $170m, plus another $120m is needed to cover the importation of 100MW from our neighbours. This leaves a power deficit of 460MW and $290m to be found to cover losses and importation.  

 

The knock-on effect of these outages on the economy are quite serious. Water companies are now rationing town water supplies, mining companies are being asked to reduce electricity consumption by 20-30% which may lead to closures and the laying off of workers. Commercial poultry producers are having to use generators that require fuel, the price of which has just been increased, dairy plants need 5hrs to recover after an 8h power-cut and a price hike in mealie-meal is threatened, to recover losses in revenue as the time available for production has been halved. Again it is the ordinary consumer who suffers most as businesses hike prices to maintain profit levels on basic food and essential non-food items. Ecologically too increased deforestation will result, as more trees will be cut down to supply charcoal. It too has risen in price as more people buy it to cook with, instead of their now useless electric stoves. The hospital too is planning to use a generator if necessary, to supply power to life-saving machinery but the erratic and poor Government grant make the purchase of fuel to run it next to impossible. There are also resulting increases in the consumption of calor gas, paraffin, candles, matches, batteries and fuel for generators causing shortages of these commodities as well, as people look for and purchase substitutes.

 

Suggestions have been made that Zambia looks to solar and there is a project underway to produce 50MW but it is unrealistic for that to be increased by tenfold overnight to meet the 560MW deficit. There are new hydro schemes proposed at Lusiwashi and Kalugwishi and 2 thermal stations at Ndola and Batoka Gorge. These are all future projects with no current funding from either government or from foreign investors. They are also likely to lead to a further increase of our national debt, but funding this infrastructure in this way, is arguably a better use of money than using it on current expenditure.

 

Although we complain about it, the price of electricity in Zambia is one of the lowest in the region and seemingly only covers about 40% of the real cost, but electricity bills are unlikely to rise till after the elections next year. There are plans as well to break Zesco’s monopoly and split it, as other neo-liberal privitisation programmes of public utilities elsewhere in the world have done, into generation, transmission and distribution sections and run them as separate businesses and eventually to open up the power market to the ill winds of combination and consensus competition at the expense of the consumer, with which we are all too familiar in the more developed world.