Consumers in Zimbabwe are feeling the strain of the tightening cost of living. A family of six now requires ZWL$8.1 million, up from ZWL$6.2 million in January this year.
This increase comes at a time when the cost of basic goods has skyrocketed, rendering them unaffordable for many Zimbabweans.
Consumer Council of Zimbabwe (CCZ), spokesperson Phillimon Chereni told <a href="https://businesstimes.co.zw/cost-of-living-squeezes-consumers/">Business Times</a> that the low-income urban earner monthly basket for a family of six has moved up by 30 per cent and is now at ZWL$8.1 million in the local currency. Said Chereni:
<blockquote>
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 January 2024. While in United States dollars there was 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.
</blockquote>
Trade unionists and economists, speaking to the Business Times, asserted that the surge in prices denominated in Zimbabwe dollars stems from the market’s refusal to accept the local currency.
President of the Zimbabwe Congress of Trade Union Florence Taruvinga said salaries are being paid in Zimbabwean dollars whilst goods and services are priced in US dollars. She said:
<blockquote>
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.
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.
</blockquote>
Zimbabwe Congress of Public Sector Trade Unions secretary-general David Dzatsunga said:
<blockquote>
This is 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.
</blockquote>
Vince Musewe, an economist, said employees earning local currency have become poorer as they are failing to meet life requirements.
Musewe said workers must earn extra income somewhere else, adding that “things will not get better until we dollarise the economy”.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Pindula News

Rising Cost Of Living Weighs Heavily On Zimbabweans

The cost of living in Zimbabwe has gone up with the Total Consumption Poverty Line rising by 4.8% in September which means that it now costs ZWL$95,462.53 (equivalent to US$17.7) for a person to meet their basic needs.
This increase is mainly due to the Zimbabwe dollar losing value compared to the US dollar, causing prices to continuously rise, <a href="https://www.newsday.co.zw/local-news/article/200017281/cost-of-living-rises-as-zimdollar-slips">NewsDay</a> reported citing official statistics from the <a href="https://www.pindula.co.zw/Zimbabwe_National_Statistics_Agency_(ZIMSTAT)/">Zimbabwe National Statistics Agency (ZimStat)</a>.
During the period under review, the Zimbabwe dollar depreciated by around 18% and 23% on official and parallel foreign currency markets respectively. As a result, businesses and service providers are adjusting their prices to keep up with the currency’s decline. ZimStat said:
<blockquote>
The Food Poverty Line (FPL) in September 2023 rose by 3,9% to $73, 235,85 from $70, 460,81 in August 2023. The Total Consumption Poverty Line for Zimbabwe was $95,462,53 per person in September 2023 representing an increase of 4,8% when compared to the August 2023 figure of $91,063,30. 
The major drivers of the September 2023 month-on-month inflation rate of 1,0% were food and non-alcoholic beverages (0,33%) and education (0,25%) and communication (0,15%).
</blockquote>
<h3>ZimSat also noted that:</h3>
– In September 2023, the inflation rate increased by 2.3% compared to August 2023, reaching 1.0%. 
– This means that prices, on average, went up by 1.0% between August and September 2023. 
– When comparing prices between September 2022 and September 2023, there was an average increase of 18.4%. 
– Education had the highest increase in prices within a month, with a rate of 6.0%. 
– Communication also saw a significant increase in prices, with a rate of 5.8%.
ZimStat also noted a change in the method of calculating inflation, using a geometric aggregation method due to 80% of transactions being in US dollars.
Economist Yona Menon Banda attributes the rising inflation in Zimbabwe to the weakening local currency. He explains that retailers are continuously adjusting prices to maintain their earnings.
The government took several measures to tackle inflation and stabilise the macroeconomy and Zimbabwe dollar including reducing the amount of money available in the economy and making fees and taxes payable in the local currency. These measures initially helped slow down the rate of inflation for a few months. However, recently, the value of the Zimbabwe dollar has started to decrease again compared to the United States Dollar.
<h3><a href="https://www.pindula.co.zw/">More Pindula News</a></h3>

ZimStat Says The Cost Of Living In Zimbabwe Has Gone Up

The <a href="https://www.pindula.co.zw/Zimbabwe_National_Statistics_Agency_(ZIMSTAT)">Zimbabwe National Statistics Agency (ZimStat)</a> has said the <a href="https://news.pindula.co.zw/2022/08/26/zimstat-cost-of-living-in-zimbabwe-goes-up-in-august-2022/">cost of living in Zimbabwe</a> increased by 11% in April compared to March. This was mainly due to the depreciation of the Zimbabwe dollar. ZimStat reported that an individual needed $33,044 in April, up from $29,778.08 in March. Said the agency in its latest cost of living statistics report:
<blockquote>
The Total Consumption Poverty Line for Zimbabwe stood at $33 044,46 per person in April 2023.
This means that an individual required that much to purchase both non-food and food items as at April 2023 in order not to be deemed poor.
This represents an increase of 11% when compared to the March 2023 figure of $29 778,08.
</blockquote>
According to ZimStat, the total consumption poverty line (TCPL) of $33 044 is the minimum total income that an individual needs to not be considered poor. ZimStat also stated that their official Poverty Datum Lines are not comparable to the cost of living indicators produced by others in the market.
Over the past three weeks, the Zimbabwe dollar has fallen to $2 100 against the US dollar on the parallel forex market, compared to $1 000 previously.
Analysts say the depreciation of the local currency can be attributed to a number of factors including the lack of adequate support structures. As a result, prices of goods and services have skyrocketed, and some shops now only accept US dollars for certain products or services. According to ZimStat, an income of $33,044 is required to avoid poverty, but this is still considered high poverty by the World Bank, which defines extreme poverty as living on less than $1.90 per day.
Some economists have argued that ZimStat’s cost of living calculation for April does not reflect the reality on the ground.
American economist Steve Hanke responded to ZIMSTAT’s report by stating that he measured Zimbabwe’s inflation rate at 455% per year on April 20, which is almost twice the official inflation rate of 243.8% reported by ZimStat. He also called ZimStat’s measurements “phoney” and criticized the director-general, Taguma Mahonde.
Economist Prosper Chitambara told <a href="https://www.newsday.co.zw/local-news/article/200010925/cost-of-living-up-by-11-zimstat">NewsDay</a> in an interview:
<blockquote>
That is not realistic and a correct figure of what an average person would require per month to survive because just food alone costs more than that.
For those who go to work if you are going to buy a plate of sadza for a dollar it means for the month you would spend almost US$20 just on food for lunch, so that is not a correct and realistic figure.
</blockquote>
Although prices of goods and services have gone up, the blended inflation rate in April was 75.2%, which is 12.4 percentage points lower than March’s rate of 87.6%.
<h2><a href="https://www.pindula.co.zw/">More Pindula News</a></h2>

CCC Latest News

Latest Jobs