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Economy & Trade

Zimbabwe’s Inflation Makes it Hard to Keep Track of Cost of Living

Stung by inflation as wages fizzle under the country's skyrocketing inflation, Zimbabwe's civil servants recently staged a strike demanding better wages although police barred the government workers from marching to the country's Minister of Finance’s office to deliver a petition detailing their grievances. Credit: Jeffrey Moyo/IPS

HARARE, Nov 8 2019 (IPS) - Stung by the country’s spiralling inflation, Zimbabwe’s government workers took to the streets this week for the first ever police-sectioned march demanding improved wages.

They asked the Minister of Finance Mthuli Ncube “to commit to a process of restoring the value of workers’ salaries to the pre-October 2018 status of $475 for the lowest-paid worker”.  Currently some teachers earn about $50 a month.

Amid a heavy police presence, the protestors were barred from marching to Ncube’s offices where they intended to deliver their petition.

Charles Mubwandarikwa, Harare chairperson of the Progressive Teachers’ Union of Zimbabwe, said “government officials never feel the pain of inflation; we only need better wages to overcome inflation”.

“It is now becoming increasingly difficult to properly price goods,” Denford Mutashu, president of the Confederation of Zimbabwe Retailers, told IPS.

IMF on Zimbabwe’s hyperinflation

  • The southern Africa nation’s annual inflation rate is the second-highest in the world, after Venezuela, at 300 percent according to the International Monetary Fund
  • Though two months ago Ncube ordered the Zimbabwe Statistics Agency to stop publicising the country’s annual inflation figures.
  • An IMF mission to the country in September, led by Gene Leon, conducted a review and progress with Leon stating, “Policy actions are urgently needed to tackle the root causes of economic instability and enable private-sector led growth”.
  • He listed the ability to contain fiscal spending as a key challenge, adding tightened monetary policy was needed to stabilise the exchange rate.
  • “Risks to budget execution are high as demands for further public sector wage increases, quasi-fiscal activities of the [Reserve Bank of Zimbabwe] RBZ that will need to be absorbed by the central government, and pressure to finance agriculture could push the deficit back into an unsustainable stance,” Leon said in a statement.

Hyperinflation harms everyone

The recommendations by the IMF would make it difficult for government to accede to the wage increase demands.

But trade unionists like Zivaishe Zhou, who is the National Coordinator of the Zimbabwe Agricultural Professionals and Technical Association, said that inflation was impacting citizens and said that corruption was responsible for the country’s economic demise.

“In Zimbabwe, surely nothing has been damaged by the sanctions, which are aimed at few companies and individuals; we have a corrupt government that is not accountable to anyone,” Zhou told IPS.

Dewa Mavhinga, the Southern Africa Director with Human Rights Watch, agreed.

“Zimbabwe authorities misinform the public that targeted sanctions are responsible for collapsing the country’s economy which is untrue. Rampant corruption and bad governance are the root causes of the country’s economic crisis,” Mavhinga told IPS.

  • The European Union (EU) and United States (U.S.) slapped Zimbabwe with financial and travel bans that targeted top governing Zimbabwe Africa Union Patriotic Front officials (Zanu-PF) for purported human rights violations and electoral fraud in 2001.
  • The BBC reports that financial and travel sanctions by the U.S. target 56 companies and 85 individuals, including President Emmerson Mnangagwa. 

The call to lift sanctions

Last month, government supporters held an anti-sanctions march, just as the U.S. included Zimbabwe’s Minister of State Security Owen Ncube on its list of restricted persons. 

Zimbabwe responded by threatening the U.S. ambassador in the country with unspecified action, with Foreign Affairs Minister Sibusiso Moyo saying “we have the means to bring all this to an end, should we deem it necessary or should we be pushed too far”.

  • U.S. Ambassador to Zimbabwe Brian Nichols had stated in an interview on Trevor Ncube’s Heart & Soul television channel that corruption rather than sanctions had done more harm to Zimbabwe’s economy.

Mnangagwa’s government has pinned the blame on the Zimbabwe Democracy and Economic Recovery Act (ZIDERA), passed in 2001 by the U.S. Senate, prohibiting Zimbabwean entities from doing business with the first world nation.

“ZIDERA has blocked Zimbabwe’s access to international credit markets, leading to the drying up of traditional sources of external finance,” Mnangagwa told a gathering of anti-sanction marchers last month.

But are sanctions to blame for Zimbabwe’s economy?

For Owen Dhliwayo, a Zimbabwean civil society activist here, “corruption in the Zanu-PF government has been prevalent even before the enactment of ZIDERA”.

Experts like Mlondolozi Ndlovhu, who holds a Master’s Degree in Society and Media Studies from the country’s Midlands State University, agree.

“The amounts that have been reported to have been stolen by government officials here even as reported by State media, shows that even with sanctions upon it for as long as there won’t be corruption, Zimbabwe can still manage to do very well in terms of its economy,” Ndlovhu told IPS.

  • In July, Zimbabwe’s former Environment, Tourism, and Hospitality Industry Minister Prisca Mupfumira was arrested the Zimbabwe Anti-Corruption Commission  (ZACC) over an alleged $95 million corruption scandal emanating from a National Social Security Authority (NSSA) forensic audit report detailing a litany of corrupt activities at the $1 billion state pension entity.
  • Mupfumira is currently out on a bail of 5000 Zimbabwean dollars.
  • This month, Joramu Gumbo, Minister of State for Presidential Affairs in Mnangagwa’s Office, was arrested for prejudicing the government of $1 million during his time as transport minister when he reportedly influenced Zimbabwe Airways, a government airline, to enter into property deals with his sister.

Reacting to the clear diplomatic standoff between the U.S. and Zimbabwe, Ndlovhu also said “a small country like Zimbabwe threatening a country like the U.S., which has the potential to bring investment into the country, only shows that the Zimbabwean government has failed to reform itself”.

But ardent Zanu-PF backers like Tafadzwa Mugwadi, see things differently.

“If sanctions are ineffective to the extent that the U.S. ambassador believes so, why has America kept them for nearly two decades now?” Mugwadi told IPS.

Taurai Kandishaya, National Coordinator of the Zimbabwe Citizens Forum, a civil society organisation with links to the ruling Zanu-PF party, agreed.

“The reason why westerners imposed sanctions on Zimbabwe was to cripple our economy,” Kandishaya told IPS.

Human rights situation worsens

Since Mnangagwa came to power, Zimbabwe’s human rights situation has worsened.

  • In August 2018, Mnangagwa unleashed the military on protesters who questioned the delayed release of the presidential election results. Six people were shot and killed as a result.
  • In January, 17 more people were shot and killed by members of the military after protests erupted following the hiking of fuel prices.
  • On Nov.6, although government had given a nod to the civil servants strike to go forward, heavily armed police blocked the protesters from marching to the Ministry of Finance. where they intended to deliver their petition detailing their grievances.

Civil society activists like Catherine Mkwapati, director of the Youth Dialogue Action Network, a democracy lobby group in Zimbabwe, believe these rights abuses are not resultant of sanctions.

“Zimbabwe doesn’t need sanctions [lifted] in order to have a professional judiciary system; it doesn’t need sanctions to go in order for us to respect human rights.”

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