Zimbabwe cost of living unjustifiably high

Zimbabwe cost of living unjustifiably high

HARARE – Nearly a decade after ravaging hyperinflation — characterised by steep commodity prices rising by the day — it seems Zimbabwe remains a very expensive country to live in.

Back then, around 2006-8, the country’s cost of living was way too high compared to its regional peers like Botswana, South Africa (SA) and even Zambia.

That remains the same today, and the current cost of fuel in the country in comparison to others in the region indicates that.

According to a latest fuel prices survey by the Zimbabwe Energy Council (Zec), the southern African nation’s petrol and diesel are way too high in comparison to other countries in the continent, even compared to the landlocked ones, whose cost build up in acquiring the commodity — transport costs and levies — is much higher.

“(In) June 2017, the price of fuel decreased by 25c (South African cents) in SA, again in July, the fuel price decreased by further 69c (South African cents).

“In Zimbabwe, it’s the opposite. When every other nation is decreasing its fuel prices, we are increasing ours! What drives and determines fuel prices in Zimbabwe, more so when we are using a stable United States (US) currency?” Zec queried.

Statistics gathered by Zec indicated that Zambia, a land-locked country like Zimbabwe, is retailing unleaded fuel at $1,11 per litre.

The Council said petrol per litre retails at $0,95 cents in Angola, $0,74 cents in Botswana, $0,79 cents in Lesotho, $1,10 cents in Malawi, $0,95 cents in SA and around $0,91 cents in Swaziland.

In Zimbabwe, a litre of (petrol) blend is averaging $1,32.

The Zec survey also indicated that diesel was retailing for $0,80 cents in Angola, $0,70 cents in Botswana, $0,81 cents in Lesotho, $1,09 in Malawi and $1,11 in Zambia.

The same commodity is averaging $1,18 in Zimbabwe.

“The issue of being landlocked does not apply here, Zambia, which is further and its fuel passes through Zimbabwe every day, is marginally cheaper than our fuel,” Zec argued.

And if it had not been Finance minister Patrick Chinamasa who shot down proposals to introduce a fuel levy — targeted at funding a Roads Accidents Fund on the back of escalating road carnage — the price of the precious commodity could have been much higher.

While the steep fuel prices may be due to the current economic challenges faced by the country, including the crippling foreign currency shortages, the high cost of goods in Zimbabwe is not limited to fuel only.

Even the prices of basic commodities in Zimbabwe are way too high as compared to regional peers.

The prices of locally produced goods have always been high since adoption of the US dollar as the key transacting currency, among others, in 2009.

Actually, retailers have increased prices in the US dollar era and even higher following the introduction of the bond notes, which saw the emergence of a three tier pricing system — one for bond notes, another for transfers or swipe and the other and cheaper one for greenback payments.

Retailers have upped their prices to cushion themselves against foreign exchange losses, with consumers bearing the brunt.

Probably, Zimbabwe desperately needs the controversial National Incomes and Pricing Commission now than it did way back in the hyperinflation era.

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