By Alois Xaba
Zimbabwe’s consumer watchdog -Consumer Council of Zimbabwe (CCZ) says cost of living for a low income family of six increased 5.7 percent in January to $577 up from $545.35 in December.
However, most employees mainly state workers earn less than the Poverty Datum Line pegged at $509,17 and they would be affected most.
A number of companies are failing to increase salaries due to depressed demand for the goods and services they offer because of liquidity challenges in the country.
This has resulted in numbers of employees being retrenched rising from 1 605 in 2010 to 3 605 in 2011, representing an increase of 2 000.
Soaring transport costs, rentals, water, electricity, health and education expenses were largely behind the increase.
“The increase is (largely) attributed to the raise in rentals which is $180.00 from $150.00 per month ($60.00 per room) for the month of January,” the CCZ said.
“It is (however) anticipated that in the compilation of the February (price) basket, rentals will revert back to the December rate as per the directive of the Minister of National Housing and Social Amenities Giles Mutsekwa,” the consumer body said.
The CCZ said the weakening of the United States dollar against the South African Rand had also resulted in an upward pressure on prices.
The rand is up more than six percent on the greenback so far this year, partly reversing some of last year’s sharp losses when investors bailed out of risky assets spooked by concerns over the US economy and the impact of a debt crisis bedeviling some European countries.
Zimbabwe ditched the local dollar in preference for more stable foreign currencies in 2009 with the South African unit and the greenback being the most widely used.
Most basic commodities are also largely imported from South Africa as local companies struggle to recover from a decade-long recession.
However the South African unit eased nearly 2 percent against the dollar on Monday and the CCZ said it was concerned that local pricing did not reflect that change.
“Retailers are quick to increase prices when the Rand strengthens against the dollar and yet they ignore when it is the other way round,” the organisation said.
The CCZ said locally produced basic commodities were beginning to make it back on the shelves but not in large enough quantities to inspire consumer confidence.
“CCZ will continue to monitor the situation closely and continue to advocate for fairer and affordable rate and price,” the watchdog said.