The cost of living is on an upward trend. I present here a summary of key findings on cost of living and related factors and their impact on wages and salaries.
Zimbabwe is currently ranked as having the second highest cost of living in Africa, after Mauritius.
26,6% of the adults 18 years and above in Zimbabwe depend on salaries and wages as their main source of income.
63,9% of the population in urban areas rely on wages and salaries as the main source of income.The informal sector employs over 75% of the total Zimbabwean workforce.
The current annual inflation rate in Zimbabwe is 288,5% as of August 2019, after averaging 10,8% in the period 2009 until start of 2019.
The month-on-month inflation rate in Zimbabwe averaged 1,07% in the period 2009 until the beginning of 2019, reaching an all-time high of 39,26% in June 2019.
Experienced a decrease in Zimbabwe’s month-on-month inflation rate over the month of August 2019 (18,07% in August 2019 versus 21,04% in July 2019).
Prices slowed for food and non-alcoholic beverages (18,6% in August 2019 vs 19,9% in July 2019).
Cost continued to advance for housing and utilities (13,7% in August 2019 vs 9,1% in July 2019).
Monthly transport inflation was higher (32,6% in August 2019 vs 26,4% in July 2019).
Employee remuneration has been eroded by a factor of 15, which is the average exchange rate now.
A family living below US$285 (ZWL$4,275) per month (i.e. International Poverty Line) is considered extremely poor. – The World Bank.
The income for executive levels surpasses their estimated basic living costs by ZWL$12 675 per month. With that amount left after basic living costs, they remain in the best position of their households.
The senior manager level had ZWL$3 606 left after meeting their estimated basic living costs.
The middle manager level had ZWL$1 673 left after meeting their estimated basic living costs. The money left is little to cover unexpected or non-essential expenditure.
The officer/professional had ZWL$185 left after meeting their estimated basic living costs. The increase in rental cost has resulted in a very low financial position for the officer/professional.
The NEC employee does not meet a basic standard of living. The gap between the National Employment Council (Nec) employee’s income and expenditure (-$441) means they will have to make some very tough choices about which basic costs of living are most essential in any month.
The negative difference between income and expenditure is a clear indication that this employee is struggling to meet a basic standard of living in Zimbabwe and facing significant financial hardship.
Sources used in this analysis include ZimStat, Professor Tony Hawkins Reports and IPC Research Reports.
Nguwi is an occupational psychologist, data scientist, speaker & managing consultant at Industrial Psychology Consultants (Pvt) Ltd, a management and HR consulting firm. — email@example.com; https://www.linkedin.com/in/memorynguwi; Phone: +263 4 481 946-48/290 0276/or mobile: +263 772 356 361 or visit: www.ipcconsultants.com.