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Prices continue soaring despite ZiG introduction



BASIC commodities are continuing to soar after the introduction of the Zimbabwe Gold (ZiG) currency last month, with large retail outlets flouting the official bank rate, worsening the cost of living, a snap survey by The NewsHawks has revealed.


On 5 April, new Reserve Bank governor John Mushayavanhu introduced the controversial ZiG which he said is backed by gold and other precious minerals to replace the inflation-ravaged Zimbabwe dollar, in a period marked by basic commodity price hikes.

While the introduction of the ZiG bank notes and coins was touted as a panacea for economic stability, we can report that basic commodity prices are still exorbitant, with retailers using various exchange rates reminiscent of the Zimdollar era.

For instance, Pick ‘n’ Pay on Harare’s Sam Nujoma Street has pegged its exchange rate at US$1:ZiG14:50, contrary to the US$1: ZiG13.56 pegged by the Reserve Bank of Zimbabwe (RBZ).

Parallel market rates are pegged at US$1:ZiG14 and US$1:ZiG21.

In the Zimdollar era, there were several exchange rates, with retailers such as Pick ‘n’ Pay, Choppies, and Innscor having their own rates.

The survey also shows that the new ZiG prices are similar to those charged by informal traders, with two kilogrammes of Ekono Rice brand now costing ZiG44.90, which is US$3.10 using the ZiG14.50 exchange rate.

Ideal Rice is costing ZiG35.85 (US$2.50), while two kilogrammes of flour are costing ZiG35(US$2.40). Multi-grain mealie-meal is costing ZiG205 (US$14.10), while white roller meal is pegged at ZiG109.50 (US$7.60).

In the less formal tuckshops, cooking oil is costing US$3.50, while rice has moved from US$1.90 to US$3.

Sugar is costing US$3, up from US$1.90, while Mazoe Orange Crush is still pegged at US$4.50.

While the ZiG notes and coins are now available, the survey has shown that consumers are still struggling to access change, which has made basic commodities even more exorbitant for most.

“Change is an issue everywhere. I end up going off-budget because vendors have no change. You are forced to purchase other things that you do not want at all,” said a consumer.

“Others already have the ZiG, but we have not seen it yet, which it worse. In terms of transport, we are still getting paired on a dollar. Either you are paired, or you pay a dollar, which has made us go off-budget in terms of transport funds. It is much cheaper when you have another person that you know who is going in the same direction.”

Most Zimbabweans are already bearing the brunt of a worsening socio-economic crisis, which has been worsened by the El Niño-induced drought.

According to the United Nations, an estimated 2.6 million people, including 1.7 million children, are projected to require urgent humanitarian assistance due to the food and nutrition crisis, floods and regional migration.

A total of 1.7 million people will need life-saving health, HIV and nutrition services. A total of 860 757 people, including 473 416 children, will require safe water for drinking and domestic purposes.

Zimbabwe has one of the highest nominal food inflation rates in the world with 60%, trailing Argentina with 251%, Lebanon with 208%, Venezuela with 91% and Turkey with 70%, according to the World Bank. The southern African country has the second-highest real food inflation pegged at 26%, second to Argentina with 40%.

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