Zimbabwe’s economic landscape is currently experiencing a period of notable stability, particularly in the realm of basic commodity prices. This positive trend is closely tied to the strengthening value of the newly introduced ZiG currency against the US dollar.
In the latest 19th Post Cabinet Brief held in Harare, the focus was on the second quarter of 2024, highlighting consistent availability and price stability of essential goods across all provinces, both in terms of ZiG and USD. The introduction of the ZiG currency, supported by gold reserves and foreign exchange, has proven pivotal in curbing inflationary pressures and ensuring a steady supply of essential commodities.
During the review period, the ZiG recorded a modest appreciation of 0.51% against the US dollar, underscoring the effectiveness of stringent monetary policies in maintaining exchange rate stability. This stability has translated into stable prices for basic goods on the market, benefiting consumers and contributing to overall economic confidence.
Key highlights from the briefing include:
- Stable Food Prices: Essential food items such as mealie-meal, cooking oil, bread, and sugar have maintained stable prices. For instance, mealie-meal prices ranged between ZiG100.01 and ZiG103.8, and between US$5.30 and US$8.50 for a 10-kilogram pack. Cooking oil prices remained within the range of ZiG54.63 to ZiG56.50, and between US$3.30 and US$4.70 for a 2-liter bottle. Bread prices were stable at ZiG14 to ZiG14.50, and between US$1 and US$1.20.
- Improved Supply Chain: There has been a noticeable improvement in the availability of sugar across the country, contributing to sustained price stability. Laundry soap, another essential item, maintained prices ranging between ZiG23.13 and ZiG23.50.
- Market Dynamics: The adoption of ZiG currency has seen significant uptake, particularly in formal retail outlets where approximately 80% of transactions are now conducted in ZiG. While some prices are still displayed in USD, transactions are universally accepted in both currencies, reflecting a transition towards broader acceptance of the local currency.
- Success in Import Substitution: Zimbabwe’s robust import substitution strategy has bolstered local industries, with manufacturing capacity increasing to 66% in 2023 from 47% in 2022. This initiative has also seen local products occupying 80% of shelf space, highlighting the country’s reduced dependency on foreign imports.
- Growth in Agricultural Sectors: The dairy industry has experienced substantial growth, with milk production rising from 75.4 million litres in 2018 to 110 million litres in 2024. This surge has significantly reduced the need for imported milk powder, contributing to economic self-sufficiency and creating employment opportunities within the sector.
The convergence of a stable ZiG currency, effective monetary policies, and successful import substitution strategies underscores Zimbabwe’s continued progress towards economic stability and sustainable growth amidst global economic challenges. This positive trajectory not only ensures price stability for consumers but also lays a solid foundation for long-term economic resilience and development.
