dual system

Zimbabwe: Inflation returns to dash hopes of higher growth

By Michelle Chifamba

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Posted on February 16, 2022 14:11

People walk past a money-changers sign at a market in Harare
People walk past a money-changers sign at a market in Harare, Zimbabwe, November 26, 2020. REUTERS/Philimon Bulawayo

Zimbabwe’s President Emmerson Mnangagwa hailed 2022 as the “Year of Economic Growth”, but persistent inflation is undermining rosy projections. Without tackling entrenched corruption, analysts doubt that the government can help the majority of Zimbabweans who are struggling to survive.

Both the World Bank and the Zimbabwe government see growth at over 5%, but analysts say this hides some serious issues.

They point to an upsurge in inflation, with food, fuel and accommodation prices all responding to the rising parallel exchange rate of foreign currency against the Zimbabwean dollar.

Average annual inflation in Zimbabwe is projected to fall from a high of 94.6% in 2021, to 32.6% next year and 17.5% in 2023, according to the ministry of finance.

On the ground however, the price of fuel, bread, cooking oil, meat and rent have been rising significantly, economist Victor Bhoroma tells The Africa Report.

  • The cost of bread is currently at $2, from $1 in December, while cooking oil has risen from $3 in 2018/2019 to $4.50 in 2021. Fuel prices have also been rising significantly from $1.20/litre of petrol to $1.45/litre of petrol.
  • Housing costs have also risen exceptionally: high density suburbs now range from $60 for a room, up from $35 in 2019. The minimum cost for renting a three-bedroomed house in medium density suburbs is around $450/month, up from $250 in 2018/2019.

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