- Annual inflation reaches 16.5% in November 2024, the highest since November 2021
- Non-food inflation rises to 14.1%, while food prices remain at an 18.2% growth rate
- With a monthly increase of 1.6% in consumer prices
- Energy regulator approves a 115% increase in electricity tariffs for large consumers
Harare- Zambia's annual inflation rate has soared for the 17th consecutive month, reaching 16.5% in November 2024, up from 15.7% in October.
This escalation marks the highest inflation rate since November 2021, primarily driven by the adverse effects of a prolonged drought. Non-food inflation has accelerated to 14.1%, up from 12.2% last month, while food prices have held steady at an 18.2% growth rate.
On a month-over-month basis, consumer prices have risen by 1.6% in November, representing the most significant increase in nine months, following a 0.8% uptick in the previous month.
The ongoing drought has adversely impacted the domestic currency, compelling the nation to lean on costly imports for both food and electricity as a stopgap measure to address critical shortages.
In response to the energy crisis, Zambia's energy regulator has approved a 115% increase in electricity tariffs for large-scale consumers, effective November 1st, to enable the state-owned power utility to offset rising import costs.
Similar to Zimbabwe, Zambia's energy portfolio is heavily reliant on hydropower, which accounts for approximately 85% of its electricity generation.
However, with the worst drought in 40 years, reservoir levels have plummeted to below 4%, insufficient for power generation.
Consequently, Zambia shut down its Kariba North Power Plant on September 14, instituting a 3-hour daily electricity supply on a rotational basis nationwide.
This situation is compounded by a downturn in global copper prices, a critical foreign exchange earner for Zambia, which has seen a 6% decline month-to-date.
These factors collectively reflects a precarious economic landscape, characterized by rising inflation, energy shortages, and fluctuating commodity prices.
Equity Axis News
