eBusiness Weekly
Business Writer
The ongoing depreciation of the Zimbabwe dollar against the US dollar is squeezing the already strained wallets of many formally employed workers in the country.
Despite being employed, a significant portion of their salaries are still denominated in the local currency, which continues to lose value at an alarming rate.
While the Zimbabwe dollar depreciates more slowly on the formal market, the erosion is far greater on the parallel market, trading at around $20 000 against the US dollar.
The black-market rate is widely used by local businesses for price benchmarking, further fueling price increases.
“After medical aid and funeral policy premiums are deducted, there is essentially nothing left of my Zimbabwe dollar salary,” said a worker with a local supermarket chain.
“The providers of these services have been raising premiums but salaries have remained static.”
Marvellous Tendai, a teacher in Harare said: “With the price of everything going up almost daily, it feels like I am earning less and less every month.”
Her experience reflects the wider issue facing Zimbabwean workers. The continued decline of the local currency makes it increasingly difficult to afford basic necessities like food, housing and healthcare.
On Monday, state health workers declared incapacitation due to “volatile economic environment which is characterised by the loss of value of the Zimbabwe dollar prices, price disparities and distortions, (and hyperinflation).”
Many workers are forced to resort to drastic measures such as cutting back on essential expenses or seeking additional sources of income to make ends meet.
The situation is further compounded by the fact that many essential goods and services are priced in US dollars, effectively pushing them out of reach for those earning in Zimbabwe dollars.
This creates a two-tiered system where those with access to hard currency have a significant advantage in terms of purchasing power.
Economists warn that the ongoing currency depreciation could further destabilise the already fragile economy.
“This has a ripple effect throughout the entire economy,” said Carlos Tadya, a Harare based economic analyst.
The Government is implementing various measures to address the currency crisis, including the proposed introduction of a gold-backed domestic currency.
As the situation continues to unfold, the question remains: how long can Zimbabwean workers weather the storm before the declining value of their salaries renders them unable to meet their basic needs?
“The decline of the Zimbabwe dollar is deeply concerning for our members, many of whom are struggling to make ends meet despite being formally employed.
“The erosion of purchasing power is creating immense hardship and threatens livelihoods across the nation. We urge the Government to take immediate and decisive action to address this issue and stabilise the currency,” the Zimbabwe Congress of Trade Union said.
