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Emmanuel Kafe
Prices of food and non-alcoholic beverages have declined by an average 30 percent this month following the firming of the Zimbabwe dollar and other interventions by Government to stabilise the economy.
New data from the Zimbabwe National Statistics Agency (ZimStat) shows that for July, retailers reduced prices of most basic goods by up to a third, meaning that food and non-alcoholic beverages are now much cheaper than they were a month ago.
Prices of basic goods rose sharply a few weeks ago, when the Zimbabwe dollar suffered heavy losses against the US dollar.
Initially, retailers did not respond to the firming dollar, maintaining high prices for most products, but the past few weeks have seen them reduce some of the prices.
The Zimdollar has strengthened considerably over the last month to trade at US$1:$4 505 last week, from US$1:$6 713 on June 16.
In response to Government economic stabilisation measures, month-on-month inflation plunged to -15,3 percent on the June rate of 74,5 percent.
“The month-on-month food and non-alcoholic beverages inflation was -30,7 percent in July 2023, shedding 134,9 percentage points on the June 2023 rate of 104,2 percent,” said ZimStat.
“The month-on-month non-food inflation rate was 2,4 percent, shedding 47,1 percentage points on the June 2023 rate of 49,55 percent.”
Last week, the Grain Millers Association of Zimbabwe (GMAZ) announced a reduction in prices of maize meal, flour and salt after “high-level consultations” with monetary authorities.
A 10kg bag of roller meal now costs $27 593 or US$5. The price of a 2kg packet of self-raising flour is now pegged at $11 547 or US$2,10, while the price of a 500g packet of fine salt has been slashed to $1 374 or US$0,25.
A snap survey by The Sunday Mail last week showed that a 2kg packet of sugar, which was retailing at around $10 500 in June, now costs between $8,500 and $9 000.
Similarly, the price of a 2-litre bottle of cooking oil has dropped to $15,900 from $17 000 depending on the brand.
The cheapest 2kg packet of rice has seen its price decline from $12 680 to $7 999.
According to ZimStat, the monthly food basket for a family of six now costs $597 520.
A survey by the Consumer Council of Zimbabwe (CCZ) last month put the cost of the family food basket at $1 015 962,61.
Economic analyst and member of the Reserve Bank of Zimbabwe Monetary Policy Committee, Mr Persistence Gwanyanya, said: “The new data means that there was a reduction in prices of basic commodities between last month and July.
“However, the reduction in prices does not mean that annual inflation has gone down.
“Once the inflation goes into the negative, it means there has been a reduction in prices, but when inflation slows down, it means prices are still rising but maybe at a reduced rate.”
Consumer Protection Commission (CPC) chairperson Dr Mthokozisi Nkosi said the new development reflects increasing purchasing power for consumers.
“This is a clear testimony that the local currency is firming, which is a positive development for consumers’ purchasing power.
“Consumers are slowly seeing the value of their income and we hope we continue on this trajectory,” he said.
However, he said, there was concern over retailers who are hiking US dollar prices of basic commodities.
“We have observed tendencies by some big retailers to increase prices in US dollars and we are not sure why they have chosen that path.
“We are now engaging business member organisations, the Competition and Tariff Commission and the Reserve Bank of Zimbabwe to find out what could be the problem,” he said, adding the engagement would help the consumer body understand the circumstances better.
“If there is no justification, we will not accept any wanton hikes of prices by retailers.”
Online Reporter