The cost of the food basket for a family of six in Zimbabwe has skyrocketed to ZWL$3,6 million, this has seen retailers now charging some goods exclusively in United States dollars (US$) owing to the depreciating Zimbabwe dollar.
One of the country’s biggest supermarket chain OK Zimbabwe recently pointed out that selected products are being sold in US dollars exclusively.
A move which has been seen as a confirmation of the death of the local currency, Zimdollar.
Apparently, in a statement, yesterday, Consumer Council of Zimbabwe (CCZ) director of corporate affairs Philimon Chereni said prices of commodities in the family basket had, however, gone down in US dollar terms to US$440,79 from US$495,04 of last month.
“As measured by the Consumer Council of Zimbabwe’s low-income urban earner monthly basket for a family of six, the cost of living measured in the local currency increased by 22,66% from ZWL$2 958 460,70 to ZWL$3 628 944,20,” he said.
“Among the top shakers and movers in the basket were cabbage, salt, tomatoes, onions and cooking oil which rose by 97,7%. 63,7% 56,4%, 50,6% and 44,8% respectively. This is partly attributed to the high demand for these products during the festive season. In contrast, water and rates, washing powder transport and education recorded the least shakers, registering 8,5%, 5,3%, 4,6%, and 1,3%, respectively.”
Chereni said the weakening in purchasing power of the local currency was driven by the relaxation of the foreign auction market exchange rate by the Reserve Bank of Zimbabwe in December last year.
He said retailers were offering discounts to products purchased in US dollars, which resulted in the decrease in US$ prices.
“It should also be noted that most supermarkets have resorted to displaying their prices in US$ form as they are most stable compared to the local currency prices which frequently have to be changed in order to match the lateral market rate.
“In US$ terms, the basket decreased by 10,96 % from US$495,04 to US$440,79 during the same period. This paradox is attributed to the dual pricing system which CCZ noted in the market.
“CCZ has noted with concern that some products in supermarkets are exclusively in US$ which disadvantages the ordinary consumer who may not be earning the US$ currency.”
Captains of the industry have attributed the price hikes to the increase in taxes by Finance, Economic Development and Investment Promotion minister Mthuli Ncube in the 2024 budget, they say this resulted in retailers passing the cost to consumers.
The Finance ministry on Monday, however, reviewed the tax measures following an outcry from consumers and various players in the industry.
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