ZIMBABWEANS have endured all forms of suffering. The struggling has been worse, economically. This can be traced back to late Robert Mugabe’s policy inconsistencies, currency volatilities, rampant corruption, chaotic farm invasions and autocratic rule, which reduced Africa’s jewel to a basket case.
In 2008, inflation reached 500 billion percent, the International Monetary Fund. Shops were empty. Zimbabweans scavenged for food.
But 15 years later, the nation is still stuck in economic doldrums. Inflation remains a headache. Food prices continue rising. On the contrast, salaries do not match the cost of living.
The World Bank has said over seven million people live in extreme poverty — almost half of the 15,1 million population. The latest figures from the Consumer Council of Zimbabwe (CCZ) are disturbing. There is just no rest for workers. CCZ says the family basket of six shot to ZW$2,6 million (US$437 at official rate) due to rising prices of basic commodities.
The problem is that not many workers earn ZW$2,6 million per month. Some civil servants earn ZW$150 000 and US$300. Other senior workers get ZW$700 000 per month. This makes it extremely difficult for families to live a comfortable life as the money is not enough to pay for rentals, food, school fees and transport costs.
It is just bad.
A closer look at the ZW$2,6 million versus the prices of goods and services shows that this figure is unrealistic — it’s too little. The cost of living is actually much higher. The main problem creating the upheavals in the economy is the weak Zimbabwe dollar. The wobbly local currency has been on a free-fall.
CCZ figures point that prices of basic commodities jumped by 20% in September due to the depreciation of the local unit against the United States dollar. Increasing prices of utility bills (water and electricity), mealie-meal and education keep pushing higher the family basket costs.
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Education, water and rates, roller meal and fresh milk were the main drivers to the basket in the month of September 2023, which rose by 52,6%, 22,5%, 19% and 14,8% respectively. Zimbabwe needs a solution to macro-economic instability.
But it is disappointing that the government is reactionary. It often times introduces “new measures” to contain a situation that would be spiralling out of control. So then what is the purpose of planning in weekly Cabinet meetings? Why are the ministers and other senior public officials enjoying hefty perks at the back of taxpayers? Recently, the Reserve Bank of Zimbabwe introduced the Zimbabwe Gold coins (ZiG) for domestic transactions. The ZiG is backed by physical gold kept at the RBZ but Zimbabweans are just sceptical. Renowned economics academic, Professor Gift Mugano raised pertinent questions about the ZiG.
"Can the Reserve Bank of Zimbabwe explain to us why we should have confidence in ZiG, that is, digital gold coins backed by gold when in 2016 the bond notes which were backed by US$200 million facility ‘secured from Afreximbank’ went up in smoke (gedye-gedye yakaramba, 1:1)?"
This tells monetary and fiscal authorities a strong message; to rebuild lost confidence on currency matters. Currency stability rides on confidence and if this is non-existent then the results will certainly be calamitous.
It is the government and RBZ’s job to work on this. It is their duty to ensure prices are stable and workers’ buying power is restored. It is Treasury’s duty to introduce non-monetary incentives to cushion workers from the rising cost of living.
I have suggested some of these patently important issues in this column. If indeed the “Second Republic” is a “listening government”, then it must live by its words; otherwise, mere talk is just rhetoric. The government must take seriously the issue of macro-economic stability in its new term (2023-2028) to, at least for now, protect its citizens who voted it into power.
This does not need overemphasis. As this is President Emmerson Mnangagwa’s final term, according to the constitution, he has a burden to leave a positive legacy. The ball is in his court. Make it work or blow away the golden opportunity like what his predecessor Mugabe did.
The government, which is cash-strapped, must cut down on luxuries for ministers and senior civil servants, such as expensive cars and housing loans.
The ease of doing business must change for the better, as investors have complained about the cumbersome processes and allegations of corruption. Authorities need to act now!