ZiG improves affordability of basic goods
MOST basic commodities have become readily available in retail outlets across the country at affordable prices since the introduction of the Zimbabwe Gold (ZiG) in April, Industry and Commerce Minister Mangaliso Ndhlovu has said.
Zimbabwe introduced a new domestic currency, the ZiG, which is backed by gold, other precious minerals and the US dollars as part of several policy measures to address exchange rate volatility, curtail inflation and restore macroeconomic stability.
The ZiG replaced the volatile and inflation-weary Zimbabwe dollar, reintroduced in February 2019 following a 10-year hiatus occasioned by high inflation.
In his presentation to Cabinet on Tuesday, titled Second Quarter of 2024 Update on Prices and Availability of Basic Commodities, Minister Ndhlovu said the last three months were largely characterised by stability in the prices and availability of basic commodities across all provinces.
He said the stability was both in ZiG and US dollar terms.
“The ZiG currency slightly appreciated in value by 0,51 percent against the US$ during the period under review, with the tight monetary stance that has been maintained having resulted in exchange rate stability, which has translated into the stability of prices of basic commodities on the market.
“The market is well stocked with mealie-meal and its price has been stable, ranging between ZiG100,01 and ZiG103,8 and between US$5,30 and US$8,50 in US dollar currency for a 10-kilogramme pack,” said Minister Ndhlovu.
“The price of a 2-litre bottle of cooking oil has been stable as well, ranging between ZiG54,63 and ZiG56,50 and between US$3,30 and US$4,70 in US dollars.
“Bread price has also remained stable, ranging between ZiG14 and ZiG14,50 and between US$1 and US$1,20 in US dollars.”
He said the sugar supply had relatively improved countrywide while its price had remained stable during May and June 2024, adding that the price of laundry soap was unchanged, ranging between ZiG23,13 and ZiG23,50.
“The prices of most basic commodities in the formal sector are gradually converging with prices in the informal market, and the prices of some basic commodities, such as cooking oil and mealie meal decreased, in response to the measures put in place to deal with price increases witnessed during the first quarter of 2024.
“There is improved ZiG uptake in the market with transactions on Point of Sale swipe machines seen to be dominant in major formal retail outlets,” said Minister Ndhlovu.
“Most outlets have pegged their products in ZiG while some few still display the prices in US dollars, although the prices are payable in both currencies.
“In most retail shops, 80 percent of the formal retailers’ transactions are currently in ZiG while 20 percent are in US dollars.”
Meanwhile, the Government is in discussions with captains of industry on the possibility of establishing a bank that would cater for the funding needs of manufacturing firms in the country and spur capacity utilisation in the manufacturing industry.
Over the years, the manufacturing sector has experienced de-industrialisation due to obsolete plants and equipment, rendering the producers uncompetitive.
This has impacted the viability of many industrial firms which encounter constant breakdowns, production inefficiencies, and frequent downtime.
Some of the companies continue to use antiquated machinery and equipment that have outlived their lifespan, although there has been huge progress in increasing production and localising value chains on account of Government support measures.
Nearly two decades of illegal Western sanctions closed avenues for affordable external lines of credit, but gradually, lines of credit have been reopening amid engagement and re-engagement by the Government.
Local firms desperately need low-cost capital to upgrade their capacity and efficiencies in the face of growing competition under the expanded African Continental Free Trade Area (AfCFTA), to which Zimbabwe is a signatory.-herald
