Govt will not be able to subsidize anything – Habazoka

Economist Dr. Lubinda Haabazoka says the government cannot revert to the old pricing cycle for fuel because they have already committed to the conditions of the International Monetary Fund (IMF) for a credit facility.

Dr. Haabazoka has reiterated the need for the government to find local solutions that do not require the involvement of international lenders such as the IMF.

He states that the long term effects are that government will have money as it will not be subsidizing anything, thereby freeing up money for other activities, but was quick to mention that the disadvantage of this is that shocks are sent direct from the international markets to households and businesses thereby killing them.

Dr Habaazoka says government needs to quickly come up with means and ways of stabilizing the economy so that the impact of the removal of subsidy does not hit households and businesses directly.