A survey conducted by NewsDay revealed that the prices of basic commodities have significantly increased since the weekend, with retailers pricing their products at double the official market.
Currently, the black market exchange rate for the local currency is between $1 800 and $2 100 to the US dollar, compared to the official rate of $1 021.
Since most workers are paid in local currency, they must sell it on the black market to buy goods with US dollars, which are scarce on the official market.
Prices of some basic commodities:
- A 2kg packet of brown sugar is now retailing for $4 264 (US$3, 28) from $3 280,
- A standard loaf is now pegged at $1 430 (US$1,10) from $1 200
- A 2kg packet of rice is now costing $11 199 from $6 199.
- A 1kg packet of Cremora powdered milk is now $6 000 (US$4,60) from $4 600;
- 2 litres of Mazoe juice is now $5 100 (US$3,90) from $3 900,
- A 2-litre cooking oil bottle is now costing $5 850 (US$4,50) from $4 500.
- A 10kg bag of mealie meal was selling for almost $10 000 (US$7,6) from $7 600.
The secretary-general of the Zimbabwe Congress of Trade Unions (ZCTU), Japhet Moyo, told NewsDay that workers are in trouble because their salaries cannot keep up with the rapidly rising prices. He said:
The salary that is coming in RTGS is wiped away. For instance, the $90 000 you were getting last week as your pay, you were able to pick maybe six items at a supermarket now you can’t get the same products. The worker is in hard times.
Obert Masaraure, the leader of the Amalgamated Rural Teachers Union of Zimbabwe, echoed Moyo’s sentiments arguing that workers require salaries in US dollars to meet their needs. He suggested that to safeguard workers and the majority of the working population, the economy should be fully dollarised.
Teachers are requesting a salary of US$1,260, but currently, they earn only US$250 on top of their local salary, which ranges from $160,000 to $200,000.
Masaraure claimed that the local currency is being used to exploit hardworking employees while the elite conduct transactions in US dollars. He believes that the local currency is being used as a form of punishment for workers and that they should be paid in US dollars.
Effie Ncube, the spokesperson for the National Consumer Rights Association, suggested that the local currency should be abandoned. Ncube argued that since the country imports a significant portion of basic commodities and has poor industrial productivity, the exchange rate plays a significant role in driving up prices.
According to economist Prosper Chitambara, an increase in Zimdollar liquidity causes the exchange rate to depreciate due to excess Zimdollar liquidity and a shortage of US dollars. This creates pressure because Zimbabwean dollars must be converted into US dollars, adding pressure to the exchange rate. Chitambara believes that upcoming elections will make it difficult for the government to abandon the local currency, as they need it to finance the polls.
Economist Vince Musewe noted that there is a shortage of US dollars in the market, causing those who possess them to sell at a premium.
Meanwhile, Fadzayi Mahere, a spokesperson for the Citizens Coalition for Change, stated that the opposition has solutions to the country’s economic crisis. These include restoring confidence, promoting macroeconomic stability, implementing fiscal discipline, addressing the debt crisis, implementing financial service sector reform, improving pension and social protection, reforming the currency system, promoting industrialization, reforming the central bank, rationalizing the land reform program, promoting agro-industrial transformation, reforming the mining sector, creating jobs, and formalizing the economy.
President Emmerson Mnangagwa re-introduced the local currency in 2019 after a decade of dollarisation and it has been losing value against the USD ever since.
A report from the Zimbabwe National Statistics Agency earlier this year revealed that the economy is moving towards dollarization, with 78% of food purchases being made in foreign currency. Additionally, around 70% of bank deposits are in foreign currency, while the rest are in Zimbabwe dollars, according to the Reserve Bank of Zimbabwe.
Despite increasing demands, the government has rejected calls to dollarise the economy.