THE inflation rate for the month of June has drastically dropped from 9.1 percent recorded in May to 7.8 percent, the Central Statistical Office (CSO) announced yesterday.

And stakeholders have welcomed the reduction in the inflation rate which is the lowest achieved in over 20 years.

CSO director Efreda Chulu attributed the significant drop in inflation to the reduction in some prices of food such as mealie- meal, maize grain, fresh vegetables and dried kapenta.

She was speaking in Ndola yesterday at the release of the CSO monthly bulletin held at Savoy Hotel.

Mrs Chulu said the annual food inflation rate was recorded at 3.8 percent in June 2010.

This is a decline from 6.5 percent recorded in May 2010.

“For the total 7.8 percent annual inflation rate in June 2010, food products in the consumer index accounted for 1.9 percentage points,” Mrs Chulu said.

She said non-food products in the consumer price index accounted for 5.9 percentage points.

And the Zambia Association of Manufacturers (ZAM) and Zambia Consumer Association (ZACA) have said the reduction in the inflation rate is a sign that the country’s economy is growing.

ZAM vice-president Sebastian Kopulande said the reduction in the inflation rate should result into reduced interest rates by the commercial banks.

“That is a good sign but that should reflect the true picture on the ground by seeing reduced interest rates,” Mr Kopulande said.

He called on the Bank of Zambia to ensure that commercial banks reduce interest rates.

ZACA acting executive secretary Samuel Simutunda said the reduced inflation rate should trickle down and benefit the people.

“Things are still the same on the ground, no realistic things have happened,” Mr Simutunda said.
He said Government has achieved its goal by ensuring that the inflation rate reduces from 9.1 to 7.8 percent.

“It is a plus if we can continue with this….but that should also translate into reduced cost of food because the price of essential commodities is still high,” Mr Simutunda said.

And Mrs Chulu said CSO intends to carry out various censuses in future.

She said the economic census phase II programme will require K45 billion to be carried out.

Mrs Chulu said the economic census is supposed to be carried out every five years.

She said phase II of the exercise was supposed to have been done in 2008 but could not take place because of the global economic meltdown.

“The phase one of the economic census involved the listing of business establishments in Zambia and phase two will involve getting details of companies to determine the true reflection of the performance of the economy,” Mrs Chulu said.

She said CSO will also conduct the agriculture census to get to know the performance of the sector in the country.

And Mrs Chulu said a survey carried out recently revealed that there has been an increase in knowledge of HIV/AIDS medication in rural than in urban areas.

She said the results indicate that the knowledge of HIV/AIDS medication in rural areas increased from 46.2 percent in 2005 to 92.3 percent in 2009.

Mrs Chulu said in urban areas knowledge of HIV/AIDS increased from 71.8 percent in 2005 to 96.7 percent in 2009.

The Zambian Government has repaid the K13 billion donor funds that were allegedly misappropriated last year by some Ministry of Health officials.

Health Minister Kapembwa Simbao said the Zambian Government was committed to paying back the donor funds, and assured that the balance of K16 billion from the K29 billion would also be paid back.

Speaking in Lusaka yesterday during a media breakfast on the update of the recent Zambian delegation’s visit to Geneva Switzerland, Mr Simbao said the alleged misappropriation of funds at the ministry last year was embarrassing for the Zambian Government.

Mr Simbao pledged Government’s commitment to the proper utilisation of donor funds in the country’s health sector.

“We are fully committed to utilising donor funds for their intended purposes, I must admit that what happened at the Ministry of Health last year was an embarrassment for all off us.

“What our people did, and I insist on our people, because its not the Government who stole the money, is very embarrassing,” he said.

Mr Simbao said the ministry would not spend any funds on workshops and seminars in 2011.
“We are fully committed to utilising donor funds for their intended purposes, I must admit that what happened at the Ministry of Health last year was an embarrassment for all off us.

“What our people did, and I insist on our people, because its not the Government who stole the money, is very embarrassing,” he said.

All workshops and seminars would instead be funded by donors and other partners.

“We have realised that there are some people who have been travelling all year round, leaving work piling in their offices because of seminars,” he said.

While in Geneva, Mr Simbao held discussions with officials from the United Nations HIV/Aids agency (UNAIDS) who assured him that the UN was interested in seeing Zambia’s image restored, and being able to access funding normally.

He reassured the donors that all money spent by his ministry would from now on be with the approval of only the permanent secretary.

The funds would now be subjected to both internal and external audits.

The Swedish government had insisted on all its funds to the government, being approved only by the permanent secretary (PS), and that no one acting in that position should approve spending of these funds.

Because of the stringent demands by the donors, the Health permanent secretary had been unable to travel outside the country.

As a result, the PS was not even able to attend the recently held World health Assembly meeting.

This measure had been taken to ensure the PS was always available to approve spending of donor funds.

Mr Simbao said all wrong doers in the Ministry of Health would be subjected to the due process of the law.

The ministry was anxious about the outcome of the courts ruling on the alleged misappropriation of donor funds by the Ministry of Health last year.

The ministry had also suffered the loss of manpower through the suspension of 35 officers, allegedly connected to the scam.

“Whatever the courts decide will be good for us, we will be able to know whether to restore our suspended officers, or make replacements, so we are waiting for the courts to decide, as the absence of 35 members of staff has stressed our operations,” he said.

World Health Organisation (WHO) country representative Olusegun Babaniyi said the UN had appreciated that the Zambian Government had shown it was not supporting the misuse of donor funds.

Dr Babaniyi pledged the continued support by the UN to help Zambia get back to its previous position with regard to donor funding.

And Country Coordinating Mechanism (CCM) for Global Fund chairperson Mwingache Siamwiza said the CCM had decided to appoint the United Nations Development Programme (UNDP) as the principle recipient of global funds meant for the health sector.

The CCM had suspended the Ministry of Health from being the principle recipient of the funds and the UNDP would now receive and disburse all global funds to the ministry.

“Global Fund had made the decision not to disburse the funds for round four, because the Ministry of Health had not met the required conditionality at the time, but following the minister’s visit to Geneva, the ministry would have access to US$8 million,” he said.