Famine risks rise: Report – NewsDay Zimbabwe

BY TATIRA ZWINOIRA
The Food Security Branch of the United States Agency for International Development (USAID) says staples are now out of reach for most low-income households.

According to the latest report from USAID’s food security arm, the Famine Early Warning Systems Network (FEWS NET), public and private sector employees are facing rising inflation while wages have remained largely stagnant.

Inflation, caused by the continuous depreciation of the Zimbabwean dollar, reached 191.6% in June, compared to 131.7% in May. The month-on-month inflation rate reached 30.7% compared to a May of 21%.

“In June, food inflation had seen a monthly increase of 31.7% and an increase of 226.2% since June 2021, contributing significantly to the overall price increase in the market. food and total consumption poverty increased by more than 30% between May and June, the highest monthly gains in nearly two years,” FEWS NET said in its new Food Security Update.

“Faced with rapidly rising inflation and largely stagnant wages and salaries, employees in both the public and private sectors are increasingly demanding salaries in USD or partly in USD to protect against this inflation and the depreciation of the dollar. Zimbabwean”.

FEWS NET said in late June that the Zimbabwean dollar was trading at $366.27/USD 1 on the official auction system, a jump of 26% from May and nearly 330% from the same period. last year.

“The allotment rate is now close to convergence with the interbank rate, which averaged ZWL 365.2 as of June 28. On June 29, the government introduced a new policy indicating that the interbank rate is now the only Zimbabwe’s legal exchange rate,” says FEWS NET.

“Meanwhile, parallel market exchange rates have risen by almost 45% since May to around 650 ZWL/USD, representing an increase of almost 400% from June 2021 rates, contributing significantly significant to ZWL price spikes.”

FEWS NET said Zimdollar payments in both formal and informal markets have now been set prohibitively high at or above parallel market rates.

FEWS NET research shows that Zimdollar prices for most commodities rose in May and June at even higher rates than in recent months.

June, in particular, saw significant price increases in US dollars, including on bread, which was up 40% since May but has now fallen slightly due to government intervention.

Cooking oil and corn flour prices increased by 30% and almost 50% respectively between May and June.

From May, shortages of some essential food items including cooking oil, corn flour and sugar were reported due to the volatility of the Zimdollar.

“Furthermore, some products that are not readily available in formal supermarkets are increasingly available in informal outlets, where they are sold exclusively in US dollars, making them too expensive for poorer households. “said FEWS NET.

“The government has responded by lifting other import bans and suspending duties on certain imported commodities for six months from May 17, including cooking oil, corn flour, sugar, rice, flour, milk, salt, soap and washing powder”.

Although the government announced measures to promote the attraction and use of the local currency and to control exchange rates and inflation, in May and June the market largely ignored them.

“June USD fuel prices rose 8% and 10% for gasoline and diesel, respectively, remaining the highest in the region. 33% and 45% at June 2021 prices,” FEWS NET said.

  • Follow us on Twitter @NewsDayZimbabwe