Consumers feel pinch of new prices

Paul Nyakazeya


AS the cost of living continues to escalate, it has become common in most supermarkets to find piles of abandoned goods at till-points.

The goods are left by shoppers unable to pay up unexpectedly huge sums of money for a few items of groce

ries.
Prices of basic commodities are increasing almost on a daily basis, forcing consumers to restrict themselves to buying basic necessities and even cut on those.

The Consumer Council of Zimbabwe (CCZ) recently announced that the cost of living shot 23,5 percentage points to $75 400 ($75,4 million) for July, from $61 million the previous month.

CCZ’s low-income urban monthly basket shows that many people are increasingly becoming poorer due to rampant price increases.

Last week the Central Statistical Office announced that the Poverty Datum Line (PDL) had surged 24 percentage points to $84 000 ($84 million) last month from $68 000 ($68 million) in June for a family of five.

The PDL represents the cost of a given standard of living that must be attained if a person is deemed not to be poor.

A fresh round of price increases experienced last week after the slashing of three zeros from the local currency foreshadows a worsening crisis for consumers.

Finance minister Herbert Murerwa recently increased the tax-free threshold for income tax to $20 000 ($20 million), a figure that has already been overtaken by the escalating cost of living before it comes into effect in September.

Economist John Robertson says if the consumer’s basket continues to increase by an average of 20% as has been the trend since January, the same basket will breach the $100 million mark by September.
Rampant inflation currently at 993% for July, is set to continue pushing the consumer basket beyond the reach of many.
There are indications that shortages of basic food commodities are likely to re-emerge due to a host of economic measures put in place by the central bank recently, as well as other measures put in place by the government despite protests from industry.
For example, bread, cooking oil and milk prices are still subject to price controls. Zimbabwe is expected to face a 60% wheat production deficit this year, and this could result in acute bread shortages, and consequently higher prices.
Supermarket shelves are already replete with products that are not controlled and very few of the controlled products.
Many families are being forced to borrow money from various sources to make ends meet.  As a result, they are being caught in a debt trap from which they are failing to escape.