THE NGO NETWORK ALLIANCE PROJECT - an online community for Zimbabwean activists  
 View archive by sector


Back to Index

Starving the nation
Crisis in Zimbabwe Coalition
March 08, 2007

On 3 March 2007, the Consumer Council of Zimbabwe (CCZ) issued a statement stating that a family basket of five people had risen to Z$686 000 from Z$462 000 in the month of February 2007, a 67.35% margin increase in the cost of goods for consumers. The CCZ also noted a sharp increase in United States dollar terms, the family basket had shifted from US$1 835.95 in January 2007 to US$2 744.46 last month (using the official rate of US$250).

The figures are a depiction of the deep-seated nature of the Zimbabwean crisis which is intrinsically intertwined in the governance crisis and the illegitimacy of the incumbent government. Zimbabwe has a strained supply being outstripped by a huge demand base. This is noted by the failure of the state to manufacture proportionate goods to meet the demand of basic commodities such as bread, seed, sanitary ware among other requirements. To close the blurring gap of supply and demand, the black market is thriving as it supplies goods at higher prices, in the process fueling the inflation rate.

Since 2000, Zimbabwe's Gross Domestic Product (GDP) has been recording a red margin. In the year 2000 it was pegged at -7.8%; in 2001 it drastically gained to -3.2%; it further deteriorated to -4.2% in 2002; the GDP plunged to an all time low record of -10.2% in 2003.In 2004, it was fixed at -4%, before shooting to -6.5% in 2005. The negative margin leapt in 2006 to -5%. For the year 2007, the International Monetary Fund (IMF) projects the GDP to set at -4.8%. Hence in this period under review, the economy has been in recession, being sustained by inconsistent and militant policies from both the Reserve Bank of Zimbabwe and the Ministry of Finance.[1]

Irrespective of taking into cognisance of its supply deficit and the noted failure to manufacture goods, the Zimbabwean government, through the Central Bank continue to print unbudgeted money. The result is high money supply (M3) in the economy chasing few goods, which become fertile soils for ballooning inflation. This scenario is not likely to stop soon, the Coalition predicts that the family basket will continue to increase on a monthly basis, till the year end, unless something dramatic happens.

Other competing factors in stimulating the monthly increase of the family basket on monthly basis include the burden brought to the national fiscus by the 85% unemployment rate being sustained by less than 1.9 million employed people of the 13 million national population.

Inflation is currently at an all time high rate of 1600%, the highest in the region, the IMF predicts the rate to be at 4000% by year end. There seem to be no visible mechanisms and policies to avert the cancerous deterioration of the economy in a place which was once esteemed as the jewel of Africa. A food and security vanguard for the region, has crumbled to a basket case of the region.

The country remains a problem child in balancing off its debts with trading partners due to the critical shortage of foreign currency. As of 2006, the country had a huge debt margin of US$3.9 billion with internal debt of US$208 million.

It is prudent for the government to start propounding policies that are in line with principles of non-corruption, transparency and accountability in order to save the nation from the jaws of economic collapse. Zimbabweans have the right to a thriving economic environment that rewards workers, civil servants, enables students to go to school and overly cherishes the idles of human rights and the rule of law.

Visit the Crisis in Zimbabwe fact sheet


Please credit if you make use of material from this website. This work is licensed under a Creative Commons License unless stated otherwise.