…As prices soar
Zimbabwe’s low income urban earner monthly basket for a family of six raced to ZWL$9715.46 on June 11 from ZWL$8725.50 at the end of May as prices soared in response to parallel market rates, a consumer watchdog
The development comes at a time when the country is experiencing the worst inflationary situation since dollarisation in 2009 as the local currency continues to plunge against the United States dollar.
The country is currently experiencing subdued production across all economic sectors including Zimbabwe’s major economic drivers which
are gold and tobacco, leaving a situation whereby the country is using elusive forex to import most goods.
Despite the ravaging high cost of living, most local companies have failed to keep up with high inflation standing at 765.67%.
The shrinking purchasing power has caused government and restive employees to be on toes, leaving the country on the edge of total economic
The Consumer Council of Zimbabwe (CCZ) told Business Times that there has been a decline in productivity by firms in the market due to the negative impact of the coronavirus pandemic but consumers have increased their demand of certain products in fear of future shortages.
“The cost of living as measured by the Consumer Council of Zimbabwe low
income urban earner weekly basket for a family of six increased to $9715.46 by 11 June 2020 from June 3 figure of ZWL$9066.88, showing an
increase of ZWL$648.58 or 7.15%,” CCZ said.
“As CCZ we assume that the increase in the total figure of the basket can be attributed to the influence of the parallel market on exchange rates, increase in fuel prices, limited supply of some basic products and panic
buying by consumers because of the lockdown.”
It said there has been a decline in productivity by firms in the market due to the negative impact of the corona virus but consumers have increased their demand of certain products in fear of future shortages.
CCZ said restrictions imposed to curb the spread of the pandemic triggered the panic buying leading to an increase in the price of most basic products.
The consumer watchdog said consumers should always seek a fair deal on the marketplace by ensuring that their rights are observed, as well as reporting any anomalies on the marketplace.
The food basket increased by ZWL$548.09 or 9.36% to ZWL$6403.56 by 11 June 2020 from $5855.47 by June 3 2020. The price of detergents increased by ZWL$100.49 or 18.44% to ZWL$645.40 from ZWL$544.91.
Increases were recorded in margarine by ZWL$0.20 to ZWL$79.49 from
ZWL$79.29, mealie meal by ZWL$10.57 to ZWL$435.07 from ZWL$424.50, brown sugar by ZWL$7.12 to ZWL$133.75 from ZWL$126.63, tea leaves by
ZWL$12.60 to ZWL$58.43 from ZWL$45.83.
Decreases were recorded in flour by ZWL$2.21 to ZWL$113.87 from
ZWL$116.08, tomatoes by ZWL$0.40 to ZWL$15.84 from ZWL$16.24 and
washing powder by ZWL$0.73 to ZWL$57.96 from ZWL$58.69.
This survey is conducted every week.
The total cost of the food basket and the price of each commodity are arrived at by averaging prices gathered from retail outlets throughout the
Confederation of Zimbabwe Retailers president Denford Mutashu said the depreciation of the local currency against the United States dollar was
causing serious problems for those retailers who would want to remain in business hence prices are bound to rise.
“Price increases and price instability are a symptom of the underlying problems that the economy is facing, therefore only localised production was going to buffer us from those shocks. Without those fundamentals addressed the situation will worsen by the day,” Mutashu said, adding that “supply on basic commodities remains too low therefore the prices are bound to rise due to demand”.
Zimbabwe Congress of Trade Union president Peter Mutasa said figures show that almost all workers are now classified as working poor.
“Most workers are earning just 15% to 25% of the consumer basket meaning that most of us cannot secure basics.
There is no doubt that we are now a failed state, it would do well if the government would accept and seek cooperation on getting out of this mess.
Unfortunately, those failing us believe they are doing well,” he said.
Government last week hiked civil servants’ and pensioners’ salaries by 50% and also cushioned them with US$75 and US$30 respectively in allowances from effects of inflation and the Covid-19 pandemic in order to ensure
that civil servants get value for money, which will come in plastic form to prevent leakages onto the parallel market.
However, this has moved prices of basic commodities in shops.
Economist Persistence Gwanyanya said the daily increase of basic commodities was linked to the volatile parallel market exchange rates.
“The prices of basic goods were bound to increase everyday due to the connection between the prices and the black market exchange rate.
When the government came up with the fixed exchange rate manufacturing companies didn’t get the desired forex on the formal market hence companies had to go to the parallel market where rates are
very high,” he said.
“Government should have stuck to the market-based rate where the market determines the rate.
Now that there is an auction system we hope things
may stabilise a bit.”