By MAIMBOLWA MULIKELELA –
Local economists and business experts have said government needs to improve fuel procurement and agricultural production to make them more efficient.
The Economics Association of Zambia (EAZ) and the Zambia Chamber of Commerce and Industry (ZACCI) said the increase in fule prices will push up the cost of living and send inflationary shock waves through an economy staggering under the weight of a volatile Kwacha.   EAZ president Isaac Ngoma said eliminating middlemen from oil procurement would bring greater efficiency to the process and save the country money.
“It is not a surprise that the price of fuel has gone up because we all know that the Kwacha has been under a lot of pressure and also other issues including the procurement system since we maintain a uniform pricing,” he said.
Mr Ngoma said the increase in fuel prices would cause prices of various goods and services to go up and in turn inflation levels would also surge.
“This is the time when we are buying maize from the different parts of Zambia we use a lot of fuel to transport it. This will translate into an increase in the price of the staple food,” he said.
Mr Ngoma said the cost of services such as transport were also expected to go up but urged transport providers to be moderate when adjusting their prices.
ZACCI president Geoffrey Sakulanda implored Government to provide incentives to agro processing and the manufacturing sectors to cushion the economic impact created by external market forces.
He said it was vital that the country directed resources to boosting the performance of Non-Traditional Exports (NTEs) especially in view of the low copper prices on the international market.
He said increasing exports was the only remedy to the current economic shocks and to the creation of a stable economic environment.
“We need to begin to produce more of the non-copper products that will stimulate the NTEs contributions to the export earnings. There are a number dynamics that took place, the mineral royalty tax which brought in stability in the mining sector, appreciation of the dollar and the recent increase in oil prices,” he said.
Meanwhile, oil extended gains on Wednesday after posting its strongest daily rise in weeks in the previous session, supported by bets that United States (US)crude stockpiles would fall for a second straight week as production slowed.
The US crude futures rose more than US$1, close to 2015 highs, after industry data showed a larger than expected drawdown in crude and oil products stockpiles last week.
The Organisation of the Petroleum Exporting Countries raised its 2015 global oil demand forecast to 1.18 million barrels per day, above a previous estimate of 1.17 million, while investors shrugged off concerns about excess supply.
June Brent crude rose 58 cents to US$67.44 a barrel.