Zim in quandary over prices spike
THE recent spike in prices of goods and services has spelled doom among Zimbabweans who are already reeling from the effects of an economy that is continuously eroding their earnings.
Various service providers recently stampeded to hike prices which further diminished the buying power of an already economically depressed citizenry.
While the government, through the National Development Strategy (NDS1) seeks to: “Reduce extreme poverty and improve access to basic social services in all its forms and dimensions, including narrowing inequalities,” the situation on the ground points to a scenario where citizens’ quality of life is plummeting.
Research has shown that Zimbabwe’s annual consumer price inflation surged for the fourth straight month to 60,7% in December of 2021, from 58,4 % in November 2021.
On a monthly basis, consumer prices went up 5,76%, almost the same as the previous month showing an upward trajectory.
One of the country’s most subscribed funeral assurers, Nyaradzo Funeral Services hiked monthly premiums for policyholders by over 300%.
A civil servant who was paying a premium of ZWL$3 427,20 (US$29,9) is now expected to fork out ZWL$11 712,60 (US$102) with effect from March 1, 2022.
This new premium, which is equivalent to about US$60 on the parallel market, surpasses the majority of government salaries with some still earning about ZWL$10 844 (US$94,7) minus allowances.
This premium hike is not only affecting civil servants but also hitting hard on members of the informal sector who are already battling to stay afloat in a business environment riddled by ravages of Covid-19.
Nyaradzo justified the increase as a measure meant to, “Preserve the value of… funeral policy benefits.”
“These increases are shocking. Our hopes of getting a decent burial are now compromised because at the end of the day you make a decision as to use the little that you are getting to feed your family rather than to feed people when you die,” said one Nyaradzo policyholder Danai Masikati.
On the banking front, civil servants banking with one local bank were this past week seething with anger when the bank advised them that they were able to withdraw US$65 from the US$75 Covid-19 allowance that the government paid them.
They described the US$10 charge as outrageous and uncalled for while other banks are said to be charging between US$2 and US$5 for the withdrawal.
“This is daylight robbery. Imagine thousands of government workers banking with that bank, each having US$10 deducted from his or her Nostro account. It is not fair,” said one of the bank’s clients Nathan Kaduwo.
Further compounding the price hike woes, the Zimbabwe Electricity Transmission Distribution Company (ZETDC) increased electricity tariffs as well.
“It is hereby notified that the Zimbabwe Energy Regulatory Authority has in terms of section 53 of the Electricity Act [Chapter 13:19] approved the following prices for the supply of electricity to customers with effect from January 1, 2022. “This is a 12,3% indexation formula adjustment shortfall. Note that the prices are in Zimbabwe Dollars,” read the ZETDC statement in part.
Economic analyst Benedict Marufu said the tariff increases experienced recently have triggered an upsurge in the prices of basic goods and services.
“Electricity drives economies. If access to power is compromised due to high charges, businesses have no option but to also hike the prices of their goods or services so that they remain viable. It is unfortunate that an average Zimbabwean will have to bear the brunt of these increases,” Marufu said.
Despite residents having to endure the hikes, access to electricity has remained a challenge with incessant power outages wreaking havoc across the country.
This week, Econet also increased its data and voice call charges leaving people further financially haemorrhaged.
The Total Consumption Poverty Line (TCPL) for Zimbabwe stood at ZWL$8 008.57 (US$69,9) per person in December 2021.
Another economic analyst, Tanaka Mandizvidza said Zimbabweans continue to face challenges to an extent that they can’t afford certain services that should be readily accessible at affordable prices.
“Basic foodstuffs are now difficult to bring to the table; getting sick is almost a death sentence because the prices of drugs and healthcare have become exorbitant.
“Now, it is difficult to be accorded a decent burial because of the recent hike in premiums. It is a sad scenario,” Mandizvidza said.
Recently, the price of flour went up by 6,5% from ZWL$112 000 (US$979) to ZWL$119 000 (US$1 040,2) per metric tonne, a situation that also pushed the price of bread up by 15% from ZWL$175 (US$1,50) to ZWL$210 (US$1,83).
The economy is also beset by foreign currency shortages and electricity outages which have pushed up the cost of production that companies pass on to consumers.
Prices of basic commodities have tripled over the months as the deteriorating local currency and the cost of energy alternatives are being factored into the final price.
There are certain products like sugar, bread and cooking oil whose pricing is negotiated with the government. Therefore as it has become a trend that whenever there is a shortage of the product, when the product resurfaces, the price is usually higher.