Watson Lumba, the Board Chairperson of Indeni Energy Limited, has highlighted that reducing fuel prices in Zambia is closely tied to improving the country’s exports and stabilizing the exchange rate. Lumba made these remarks during a call-in segment on ZNBC’s Sunday Interview, which featured Highvie Hamududu, the president of the People’s Alliance for National Unity and Progress (PNUP).
In his discussion, Lumba acknowledged the complex factors influencing fuel prices, including Zambia’s limited control over the international oil market and the volatile exchange rate. He emphasized that improving and diversifying Zambia’s exports would not only help stabilize the economy but would also positively impact the exchange rate, which is crucial for reducing fuel prices.
“The challenge with fuel pricing lies in factors beyond our direct control. We cannot dictate the prices on the international oil market. Additionally, fluctuations in the exchange rate play a significant role in the cost of fuel,” Lumba explained. “However, if we work towards diversifying our exports and strengthening key sectors of the economy, we can create a more stable financial environment that would ultimately help bring down fuel prices.”
Lumba’s comments came in support of PNUP president Highvie Hamududu’s earlier explanation on the economic challenges Zambia faces in managing fuel costs. The two leaders agreed that addressing the underlying economic factors is essential for long-term solutions to fuel price fluctuations.
One of the key issues that Lumba raised was the need for Zambia to enhance its export sector, which could include increasing exports of non-traditional goods and services. By doing so, the country could earn more foreign currency, which would help cushion the economy against external shocks such as rising oil prices.
Furthermore, Lumba pointed out that a more diversified economy, coupled with strengthened foreign exchange reserves, would enable Zambia to better manage its fuel importation costs. This would reduce the pressure on the local currency and, in turn, ease the burden of high fuel prices on the citizens.
“Diversifying our exports will not only boost our foreign currency reserves, but it will also stabilize the exchange rate. A stronger exchange rate translates to lower fuel prices, which is essential for the well-being of every Zambian household and business,” he added.
Lumba’s comments shed light on the broader economic factors that must be addressed to ensure sustainable fuel pricing in Zambia. While fuel price reductions are highly desirable, they are intricately linked to economic policies aimed at stabilizing the national currency and increasing foreign currency earnings through exports.
As the Zambian government continues to explore ways to manage fuel prices, Lumba’s insights serve as a reminder that long-term economic growth and diversification are key to addressing the structural issues behind fuel price volatility.
In the interview, both Lumba and Hamududu agreed that the current economic situation requires urgent attention and a collaborative approach from both the government and private sector. They stressed that the time had come for Zambia to look beyond immediate solutions and focus on creating a sustainable economic framework that will serve the country in the long run.
The discussion ended with a call to action for Zambia to prioritize economic reforms and investments in sectors that can boost exports, attract foreign direct investment, and ultimately create a stable and resilient economy capable of handling external pressures like fluctuating fuel prices.
By focusing on export diversification and addressing the root causes of exchange rate volatility, Zambia can take significant strides towards reducing fuel prices and improving the overall economic stability for its citizens.
