PRICES of goods, including basic commodities, critical medical drugs and rentals, increased sharply as inflation shot up recently to 72,7%.
The Zimbabwean dollar (Zimdollar) continues to depreciate. It is on a free-fall with the parallel market rate ranging between a staggering ZW$280 and ZW$300 to US$1. The Zimdollar has also weakened on the foreign currency auction floor each week. It now stands at US$1:ZW$145,87.
The conflict in Russia and Ukraine has worsened an already complicated economic situation as global fuel prices spiked. It also disrupted supply chains.
The macroeconomic situation remains volatile. It negatively affects livelihoods and access to food, especially among poor households. This is compounded by the United States dollar being the preferred currency of trade. Most commodities and services are either charged in USD or parallel market rates are applied for Zimdollar payments.
A snap survey by the Zimbabwe Independent this week on several supermarkets around the central business district (CBD) revealed a startling rate of economic decay.
Hard-pressed Zimbabweans, who are surviving from hand to mouth, now have to brace for a round of steep price increases.
A comparison of prices of mealie meal, cooking oil, sugar, beef, and bread among other basic commodities showed a sharp rise this week compared to March.
Mealie meal (10kg), which cost ZW$1 159,99 (US$7,84) in March is now ZW$1 271,55 (US$8,59) and 2kg sugar which was ZW$565,99 (US$3,82) is now ZW$629,99 (US$4,26). Other price increases include a 2litre bottle of cooking oil which was sold for ZW$ 989,99 (US$6,69) in March and is now ZW$1 179,99 (US$7,97) and beef was increased from ZW$1 199,90 per kilogramme (US$8,11) to ZW$1 329,90 (US$9). A loaf of bread was going for ZW$239,99 (US$1,62) and now pegged at ZW$ 273,99 (US$1,85). Surprising, even prices in United States dollars have been going up recently. Sadly, employers cannot match the salaries to the inflation rate. Most companies can barely afford USD salaries.
Already, many Zimbabweans can hardly make ends meet with many families surviving on one meal a day. Zimbabwe is experiencing food insecurity and deteriorating nutrition, which has been exacerbated by the depreciation of the local currency, Covid-19 and poor harvests during the 2021/2022 summer cropping season.
It is estimated that more than 8,5 million people are in food crisis. The World Food Programme (WFP) states that between January and March this year, about 27% of rural Zimbabweans will be food insecure. This translates to close to three million people. These astounding figures are worrisome.
Consumer Council of Zimbabwe (CCZ) public relations officer Christopher Kamba told the Zimbabwe Independent this week: “We are concerned about incessant price increases which have eroded the buying power of consumers”. The price spikes are pushing poverty levels up in the country where most people live on less than a dollar a day.
According to the Zimstat 2020 report, extreme poverty increased from 30% in 2017 to an estimated 49% during the Covid-19 pandemic. In addition to the food crisis, the country suffered a massive economic recession in 2019, which continued into 2021.
Inflation has remained high due to an unstable local currency, foreign currency shortages, expensive fuel and electricity, drought, policy inconsistences and low confidence levels. The Covid-19 pandemic worsened an already precarious economic situation as some company have closed or scaled down, leading to job losses, while some firms could barely break even.The situation is compounded by the fact that more than 95% of the population make a living from the informal sector.
Life has been difficult on Zimbabweans. Stress levels are leading to mental health issues, such as anxiety and depression, substance abuse, insomnia and muscle tension.
Many people are struggling with day-to-day demands in a market where everything is very expensive, including rent, now being charged in US dollars or equivalent at parallel market rates.
We are likely to see return trends, experienced during the 2008 hyperinflation period, where tenants were forced to move from houses due to the continuous rise of rentals as the local currency depreciates daily against major currencies. Government needs to find lasting solutions to arrest inflation and contain currency volatility. Poverty is a killer and poses a national security threat.