Cost of living squeezes consumers

LIVINGSTONE MARUFU AND TENDAIISHE  NYAMUKUNDA 

Consumers are feeling the strain  of the tightening  cost of living  squeeze   a family of six  now  needs ZWL$8.1m , up from ZWL$6.2m  in January this year, Business Times can report.

It comes at  a time when the cost of  basic goods has skyrocketed this week, rendering  them unaffordable  for  many Zimbabweans, according to the Consumer Council of Zimbabwe (CCZ).

“The CCZ’s  low income urban earner monthly basket for a family of six moved up by 30% and is at ZWL$8.1m  in the local currency, up from ZWL$6.2m recorded for the month of January 2024. While in United States dollars there was actually a 1% decrease to US$544 from US$551. This decrease is attributed to the discounts that some shops are giving consumers  discounts if they buy using the United States dollars,” CCZ spokesperson Phillimon Chereni told Business Times.

Multiple analysts said the increase of prices in Zimbabwe dollars is a result of the rejection of the  local currency by the market.

President of the Zimbabwe Congress of Trade Union Florence Taruvinga said that since most commodities are now priced in United States of America dollars, consumers have suffered as a result of salaries being paid in Zimbabwean dollars.

“Workers continue to be paid in Zimbabwe dollars which they then use to buy the elusive American dollars. In real terms, this has seen real wages depreciating in any economy that has dollarised.

“The goods and services which shops are reducing prices are only a decoy as loss and pretence ,basic goods and services remain expensive and out of reach for my constituency,” Taruvinga said.

She said the 30% increase is based on the fact that the economy has dollarised.

“Employers and businesses have realised that the only best foot forward if they want to remain afloat is to charge for services and commodities in United States of America dollars. However for my labour constituency the dollarisation of the economy comes as a double edged sword,” Taruvinga said.

Zimbabwe Congress of Public Sector Trade Unions secretary-general David Dzatsunga weighed in saying the Zimbabwe dollar salaries  were no longer sustainable.

“This is obviously a catastrophic escalation of the ever widening income and cost of living gap and if wages remain where they are, there is going to be total incapacitation with dire consequences for the nation in terms of service delivery,” Dzatsunga said.

Vince Musewe, an economist, said employees earning local currency  have become poorer as they are failing to meet life requirements.

“For those earning  the Zimbabwe dollars they continue to get poorer due to diminishing purchasing power. This is the plight of many workers and no doubt they must earn extra income somewhere else. Things will not get better until we dollarise the economy,” Musewe  said.