LIVINGSTONE MARUFU
ZIMBABWE’S low income urban earners’ monthly basket for a family of six increased 72.48 percent to ZWL$3943 the end of October 2019 from ZWL$228.52 by the end of September 2019 due to rampant inflation, foreign currency shortages and power outages.
The development comes at a time when the country is experiencing its worst inflationary situation since dollarisation as the local currency continue to plunge due to the fact that the re-introduction of currency was not backed by fundamentals.
“The cost of living as measured by the Consumer Council of Zimbabwe low income urban earner monthly basket for a family of six increased from the end-September 2019 figure of $2286.52 to $3943.88 by endOctober 2019, showing an increase of $1657.36 or 72.48 percent,” CCZ president Rosemary Siyachitema said.
CCZ said the food basket increased by $695.28 or 46.03 percent to $2205.55 by end-October 2019 from $1510.27 by end-September 2019. Increases were recorded in margarine by $7.48 to $24.07 from $16.59, mealie meal by $22.23 to $128.21 from $105.98, brown sugar by $1.92 to $31.79 from $29.87, tea leaves by $5.06 to $19.82 from $14.76.
Meanwhile, the price for fresh milk rose by $1.33 to $7.12 from $5.99, cooking oil by $6.21 from $14.85 to $56.21 from $50 per 2 litre bottle, bread by $5.99 to $15.17 from $9.18, flour by $15.34 to $41.74 from 24.40, rice by $4.16 to $35.53 from $30.92. There were some price decreases recorded in salt by 2 cents to $8.83 from $8.85, cabbage by 16 cents to $4.35 from $4.33 and onions by 97 cents to $17.17 from $18.14.
“As CCZ we assume that the increase in the total figure of the basket can be attributed to an increase in fuel price, cash shortages, influence of the parallel market on foreign currency exchange rates and low supplies of some basic products,” Siyachitema said. “Supermarkets are being affected by load shedding therefore products like meat and other perishables end up being in a bad state. CCZ can confirm that the demand for meat in most supermarkets has gone down because consumers are now purchasing substitute products such as chunks.”
CCZ said consumers should seek a fair deal on the marketplace by ensuring that their rights are observed, as well as reporting any anomalies on the marketplace.
Confederation Retailers of Zimbabwe president Denford Mutashu said the general pricing in the country is outrageous and not reflective of the situation on the ground as some suppliers continue to increase prices even when the exchange rate has stabilised or fuel price has maintained or gone down. Mutashu attributed the increase in the prices to a “third force”.
“As a country we should deal with the supply side to saturate goods on the market so that we can contain rampant suppliers who continue to increase prices. There is a talk of bonus by government in November but if it doesn’t address the price headache that 13th cheque will be wiped out before it even comes,” Mutashu said.
Zimbabwe Congress of Trade Unions (ZCTU) president, Peter Mutasa said if the basket is compared to the average salary, it shows that the majority of the workers in Zimbabwe are in slavery. “Workers have lost dignity and cannot afford the basics necessary for decent lives. We have been reduced to scavengers and all are pauperised. Workers and their families are starving in homes barely affording one meal a day and some in ivory towers think the solution is sending state security to beat citizens into dying silently,” Mutasa said.
“Without public hospital doctors many workers and their families as well as other citizens are dying in homes without medical care. This is pathetic.”
He blamed government for the state of affairs.
“The Government must ensure that workers get back their USD salaries. Without that workers must fully participate in various forms of collective actions we are soon going to call for,” Mutasa said.
The country is currently undergoing subdued production across all economic sectors including major economic drivers which are gold and tobacco. This has resulted in the country 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 which some economists now rank at 500 percent.
The shrinking purchasing power has caused government and restive employees to be on toes since the beginning of the year. Since January there had been series of demonstrations, strikes and go slows. The government has continuously increased salaries of civil servants to above $1000 for the least paid worker but the money was eroded before it could hit the workers’ bank accounts. The situation is even worse in the private sector which is opting for retrenchments to cut costs.
Recently, Old Mutual Zimbabwe called for voluntary retrenchments to reduce rising costs. Employers’ Confederation of Zimbabwe president Israel Murefu said the operating environment had become difficult for employers to cope with rising inflation.
“The operating environment is very tough and challenging because the essential ingredients necessary to run business operations namely water, power or electricity and fuel are scarce, in some instances not available and expensive,” Murefu said.
“Coupled with high inflation, runaway exchange rate and inadequate foreign currency, we are not aware if there is any business running at full capacity and when capacity utilisation is very low, the unit cost of production goes up because you do not benefit from economies of scale or any other potential synergies.”
Murefu said despite many employers are going out of their way to provide cost of living allowances to cushion employees, their efforts fall short of desired effect due to inflation.
