According to ZIMSTAT, in May 2022 year on year inflation stands at 131.7 percent. Month on the monthly inflation rate for May 2022 is at 21 percent (up from 15.5 percent in April 2022). This represents a 5.5 percent surge in the month on month inflation. So when you hear mention of rising inflation this is what we will be talking about. There are so many factors contributing to this. Unfortunately more policies being enacted by the Zimbabwean government are making it worse.
For example, we have the recently reviewed withdrawal levy – for cash withdrawals above US$1000, it is now 2 per cent per transaction (up from US$0.05). Then there is the review of IMTT to 4 percent for local foreign currency transactions. All this and more are causing the cost of living to rise in Zimbabwe. In this article, I am painting a picture for you of the current cost of living in Zimbabwe.
Let Us Break It Down – CPI, FPL, And TCPL
First, let us look at the Customer Price Index (CPI). For the month ending May 2022, the CPI currently stands at ZWL$6662.17 (up from ZWL$5507.11 for April 2022). For comparison, the CPI was ZWL$2874.85 for May 2021.
The Food Poverty Line (FPL) as of May 2022 is standing at ZWL$10 537 (in April 2022 it was ZWL$8366). FPL represents the least amount of income one needs to be able to afford basic foodstuffs. The Total Consumption Poverty Line (TCPL) is now at ZWL$14 041 (in April 2022 it was ZWL$11 363). By the way, TCPL refers to the minimum amount of income needed for one to not be regarded as poor.
U-Turn On SI 127 Of 2021
SI 127 of 2021 made mandatory for businesses to use the official interbank rates for dual pricing i.e. US dollars and Zimbabwe dollars. Recently, it was officially stipulated that businesses can now use willing buyer, willing seller exchange rates. These are exchange rates that banks are using for day to day operations. How does it work, you may wonder? Businesses get to use any rate so long it is within 10 percent of the prevailing willing buyer, willing seller exchange rate. So that has had a notable effect on pricing.
Domestic Workers Minimum Wages Recently Set – Unbelievable!
According to SI 101 of 2022 recently gazetted, the minimum wage will be ZWL$10 000. There are slight differences when you compare gardeners and housekeepers. For gardeners, the minimum wage is ZWL$10 000 monthly, ZWL$2500 weekly, ZWL$454.50 daily, or ZWL$50.50 hourly. For housekeepers, the minimum wage is ZWL$10 500 monthly, ZWL$2625 weekly, ZWL$477.30 daily, or ZWL$53.03 hourly. For non-live-in domestic workers, it was stipulated that they should be given a ZWL$4000 transport allowance.
Electricity, Fuel, And LP Gas
Effective 15 May 2022, ZETDC reviewed electricity tariffs. Initially, they did not specify the new tariffs in light of the stepped tariffs. Later on, ZERA updated the stepped tariffs on their website. They are now as follows:
1 to 50 units (ZWL$8.02 per unit)
51 to 100 units (ZWL$16.08 per unit)
101 to 200 units (ZWL$28.17 per unit)
201 to 300 units (ZWL$40.22 per unit)
301 to 400 units (ZWL$46.22 per unit)
401units and above (ZWL$48.24 per unit)
This means that:
The first 50 units now cost ZWL$401
The next 50 units now cost ZWL$804
The next 100 units now cost ZWL$2817
The next 100 units now cost ZWL$4022
The next 100 units now cost ZWL$4622
So, the first 200 units now roughly cost around ZWL$4022. You probably also know that fuel prices were recently hiked. Blended petrol (E10) and diesel 50 now cost ZWL$481.02 (US$1.68) and ZWL$499.56 (US$1.74) respectively. Liquid Petroleum Gas now costs ZWL$337.96 or US$2.32 per kilogram. That wraps up a summarised overview of the cost of living in Zimbabwe as of May 2022.