We are less than 2 weeks away from wrapping up the year 2019. It has been quite an eventful year like I have pointed before and I am no doubt preaching to the choir on that. For most people, it has been an extremely tough year filled with unpleasant memories. On the contrary, it has also been a year where most people actually took up opportunities that revolutionized their financial lives. Anyways, in this article, I am just going to walk through some of the key economic highlights that occurred this year.
Price Increases Were Incessant
Price increases had somewhat started late 2018 but when we stepped into 2019 it became too regular. If you recall starting from around March this year things like mobile services tariffs started going up – something that stayed put all year long. Inflation was on a rampage and that triggered a chain reaction that saw all sectors of the economy announcing price hikes from time to time. ZESA tariffs started off static since ZERA did not allow the power utility company to hike tariffs (despite insisting on a tariff hike). Come August, though, ZESA finally got the green light to hike tariffs and put in effect their stepped tariff regime which we now adhere to. Anyways, price hikes were the order of the day with fuel price hikes getting to a point of being weekly. Prices of basic commodities were also occasionally going up especially after fuel price hikes.
Power Shortages Stayed Put
This was and has been topical in 2019 because the scourge was heavily felt. I still count myself highly blessed for staying in a place where there has been no load shedding at all. However, I truly feel the plight of the majority of Zimbabweans who have had to contend with incessant power cuts. Despite electricity tariff hikes, power challenges still reign locally with most people getting power for 7 hours or less. Power challenges have led to untold struggles for the business community, both small and big.
Focus Economics which is a research firm that provides reliable economic data for over 130 countries revealed this. With a focus on the Misery Index which looks at unemployment and annual inflation rates, Zimbabwe came at second position trailing behind Venezuela. This was a testament to how low the Zimbabwean economy has sunk.
Incomes Failed To Keep Up With Inflation
Inflation and price increases fed into each other and the cycle was perpetual. Goods and service providers were hamstrung by the operating environment to continue hiking prices in order to stay afloat in business. This was unpleasant for the consumers because their incomes remained somewhat the same. Right now it has been a while ever since doctors downed their tools citing displeasure at their meagre incomes. The story has been similar to the civil service sector in general. Across all sectors of the economy, monthly salaries or incomes failed to outpace the rising inflation. This made life an agony for the majority of Zimbabweans.
Currency Reforms And The Statutory Instruments (SIs) Kept Coming
Early in the first quarter of the year, the 1:1 parity of the US dollar and bond was officially scrapped. Much later on in the year, we saw the coming in of the SI 142 of 2019 which stipulated that the multicurrency regime was no more and that the ZWL$ was now legal tender. Well, we all know what happened later as the government started issuing exemptions and right now people freely do transactions using foreign currency. Recently new coins and notes were introduced but nothing has really changed in terms of cash shortages. Currency reforms, overall, have actually catalysed further growth and dominance of the parallel market.
There were also quite a number of statutory instruments (SIs) that came along during the year – I will just mention some of them. SI 171 of 2019 also came onto the scene validating the last wave of significant toll fees hike. The banning any new electric geyser fittings and other associated regulations were announced not too long ago under SI 235 of 2019. It goes without saying that currency reforms and some of the SIs further flushed the economy down the drain.
The ZUPCO Initiative
Many of you will recall the turbulent demonstrations that rocked this nation some time at the beginning of this year. You will remember that it was after there had been a sharp fuel price hike. It was following this that we saw the coming in of the ZUPCO initiative to cushion the commuting public. Most commuters were now at the mercy of the usual commuter operators who were charging steep fares due to the cost of fuel. Despite lots of scepticism the ZUPCO initiative has remained standing and has even extended to kombis also. Of course, the initiative has been and still is providing relief to the commuting public but concerns still remain. This is stemming from how the initiative is being bankrolled especially in light of how far removed the fares are from fuel prices. Recently concerns were cited on how the initiative is gobbling loads of funds to stay in session.
Cushioning Allowances Became Commonplace
This trend was a common feature this year in many businesses or companies. This was borne out the realization that employees were struggling to make ends meet. Thus, it became commonplace for some companies or businesses to give their workers cushioning allowances.
These are some of the noteworthy economic highlights from 2019. Doubtless more happened this year but I just thought these might be worth mentioning. Moving forward into 2020 it is everyone’s wish that things should get better. Unfortunately, throughout this whole year the fundamental aspects that can get this economy back on its feet have not been objectively addressed. It has mainly been a majoring on symptomatic issues as opposed to the root causes. It is with that background that many feel the struggle is still on.