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Zimbabwe Inflation Consuming Consumers

FILE: Prices of basic commodities, including sweet potatoes that are a substitute for bread, are going up almost every week in Zimbabwe. Taken 6.12.2022

With Zimbabwe's runaway inflation eating into incomes, staple foods have vanished from the tables of many families. Some assert the nation needs to adopt the U.S. dollar as its currency in order to bring stability to the economy.

"I can't remember the last time I ate meat. It has become a luxury for some of us," said 57-year-old single mother Emina Chishangwe, who lives in a poor dormitory town south of the capital Harare.

A kilo of choice beef now costs ZWL8,768 ($21.92) and five kilos of chicken drumsticks ZWL21,000 (US$65.22) -- the equivalent to a civil servant's average monthly salary.

Rising fuel prices forced Edwin Matsvai to downgrade from a fuel-guzzling Toyota Land Cruiser to a more economic Honda Fit.

"My friends made jokes about me 'stepping down' when I made the change but now some of them are considering following suit," said Matsvai, a car salesman.

Petrol rose to US$1.77 per litre this month from US$1.41 in January.

Zimbabwe has the highest inflation rate in the world, soaring to 191.6 percent in June, up from 60 percent at the beginning of the year, driving prices of goods ever upwards.

The situation quickly worsened this year as the Russian invasion of Ukraine compounded with black market foreign exchange has depleted the value of the Zimbabwe dollar.

Distrust has led people to exchange their cash for US dollars, further driving down the local currency.

Steve Hanke, a professor of Applied Economics at Johns Hopkins University, says Zimbabwe's spiral can only be remedied by the full adoption of the US dollar as the nation's currency.

Last month Finance Minister Mthuli Ncube announced a raft of monetary policies including maintaining the dual use of the US dollar, adopted after the 2008 hyperinflation, and the Zimbabwe dollar reintroduced in 2019.

The risk of losing power in upcoming polls is now pushing Zanu-PF to "frantic measures" to halt price hikes that have plunged millions into deeper poverty, said economist Prosper Chitambara.

"The world over, no ruling party is expected to do well in an environment of chronic high inflation," said Chitambara, of the think-tank Labour and Economic Development Research Institute of Zimbabwe.

Analysts say the current political and economic landscape now mirrors the crisis leading into the 2008 election, which saw ex-ruler Robert Mugabe nearly fall from power.

"People who are earning starvation wages, those without jobs and all those who are feeling the pinch of the rising cost of living have lost faith in Zanu-PF," said Takavafira Zhou, a political scientist at Masvingo State University.

"The only hope lies in a new government that will give (the public) reprieve."