Wednesday, September 30, 2020

Zimbabwe inflation expected to top a million percent

Zimbabwe’s annual inflation for April reached 750 000 percent setting a new African record as the country’s economic woes show no signs of abetting.

Figures leaked from the Central Statistical Office, custodians of official data, showed that inflation had risen to 355 000 percent in March from 165 000 percent in February raising fears that the figure would reach 1 million percent in May. Projections made by the CSO show that the May figures would reach 1.3 million percent.
CSO are yet to release the February, March and April numbers.

The leaked figures are likely to cause embarrassment to Central Bank chief, Gideon Gono, who has vowed that inflation would hit single digits this year.

Gono, who assumed the powerful post in 2003 to remedy the country’s economic ailments, had, in previous statements, vowed to crush the inflation dragon. His statement, “Failure is not an option”, has returned to haunt him, analysts warned last week.

Last week, Gono introduced new bearer notes- Z$50 billion, Z$25 billion and Z$5 billion so-called agro cheques to ease convenience to farmers. The agro cheques can be used to buy goods.
Gono also introduced Z$500 million bearer cheques to ease consumer woes of carrying bags of cash.

“The wheels are off,” said a bank economist who could not be named for fear of reprisal from the Central Bank. Top officials in the financial services sector are vetted by the Reserve Bank of Zimbabwe before they are appointed to key positions.

The new notes come hard on the heels of the introduction of a Z$100 million and Z$250 million note three weeks ago.
However, the notes have been chasing shadows as a new wave of price increases has eroded their value.

A one-way trip on public transport costs Z$100 million while a loaf of bread is now pegged at Z$171 million beyond the reach of the majority who live on less than $1 per day.

Analysts say Zimbabwe’s economic slide is unprecedented in a country not at war.

Since June last year, Zimbabwe has been in a hyperinflationary mode, a condition where month on month inflation is over 50 percent.

“No government has survived hyperinflation,” said a banking executive.

Economic commentators say the issue of the economy will play a central role in campaigning for the presidential run off billed to be held before August.
MDC’s Morgan Tsvangirai faces off with Zanu PF’s Robert Mugabe in the most significant election since 1980. Tsvangirai garnered 47.8 percent against Mugabe’s 43.2 percent but was unable to get the majority vote, setting the stage for a bruising run off.

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The Telegraph September 30

Digital edition of The Telegraph, September 30, 2020.