Annual inflation rate for February surges to 782 p

Herald Reporter

ZIMBABWE’S annual inflation rate for February has surged to 782 percent, up 168,8 percentage points on the January figure, according to figures released by the Central Statistical Office (CSO) yesterday.

Addressing a Press conference in Harare, acting CSO director Mr Moffat Nyoni said prices of goods and services as measured by the Consumer Price Index rose by an average of 782,0 percent between February last year and the same month this year.

This means that on average, goods and services normally bought for household use in Zimbabwe were about eight times as expensive in February this year when compared to the same period last year.

"The month-on-month rate of inflation was 27,5 percent, gaining 8,9 percentage points on the January 2006 rate of 18,6 percent.

"This means that on average, a bundle of goods and services for household final consumption that cost $100 000 in January 2006 would cost $127 500, a month later in February 2006," Mr Nyoni said.

The poverty datum line varied province by province, ranging from $22,5 million in Masvingo to $28,6 million per month in Manicaland for an average family to survive.

The February Food Poverty Line (FPL) for an average family of five persons stood at about $9 million, representing a gain of 16,27 percent relative to the January figure of $7,8 million.

Mr Nyoni noted that factors driving the inflation rate included rentals.

"Year-on-year food and non-alcoholic beverages inflation stood at 824,7 percent, up from the January figure of 785,5 percent, while non-food inflation was 762,0 percent, up from the January figure of 533,7 percent," he said.

Goods and services showing the highest February rises included rent at 6,73 percent, telephone and telefax services (2,02 percent), passenger transport (1,08 percent), and college and tertiary education at 1,42 percent.

Lowest increases were recorded in postal services, examination fees and insurance.

The CSO has adopted a new format of measuring inflation — the Classification of Individual Consumption by Purpose.

The new system — which is in line with international guidelines — is expected to give more realistic figures.

Inflation has progressively been rising owing to growing economic difficulties and persistent foreign currency shortages.

This has resulted in the prices of essential services, basic commodities and household goods shooting through the roof.

Related item :

State to ban gold panning

Herald Reporter

GOVERNMENT will soon come up with legislation banning gold panning, which has resulted in serious environmental degradation in some parts of the country, chief mining commissioner Mr Fredson Mabhena has said.

Mr Mabhena told the Parliame-ntary Portfolio Committee on Mines, Environment and Tourism last week that there was need to find a lasting solution to the problem of gold panning.

He was briefing the committee on the progress made in drafting the Mines and Minerals Amendment Bill.

"On the issue of panning, we think it is a short-time gain measure and basically we are banning that. My minister (Mines and Mining Development Minister Cde Amos Midzi) is the one who should announce this, but we are moving towards that," Mr Mabhena said.

Gold panning, he said, had caused a lot of damage to the environment.

It has also resulted in the death of those involved, apart from haemorrghing the economy through illegal gold deals and facilitating smuggling. Government has in the past tolerated gold panning activities provided they were conducted in a manner that did not pose a threat to the environment.

Mr Mabhena said in a widened move to ensure that the mining sector played a pivotal role in conserving the environment, an environmental fund would be established to which mining companies would contribute.

Turning to the issue of dormant mining claims, he said there were proposals to reclaim them.

"There are numerous claims lying idle. We want to come up with a situation in which when you register a claim you must be able to work on it," Mr Mabhena said.

A senior official in the Ministry of Mines and Mining Development, Mr Titus Nyatanga, told the committee that it had taken long to finalise the Bill because there were a number of issues that needed to be considered.

"What we are striving for is that at the end of the day we have a durable document," he said.

Other highlights of the Bill included provisions for Government to acquire 50 percent ownership of some mines, both new and existing, over the next seven years.

More on this story:

Zimbabwes Biggest Daily Online Newspaper - Inflation Hits Record High Zimbabwe Daily News

Inflation Hits Record High

Friday, March 10 2006 @ 10:18 AM GMT
Contributed by: correspondent

Zimbabwe’s year-on-year inflation has raced to a record high of 782 percent- the highest increase ever recorded in the country, according to the Central Statistical Office (CSO). The price of goods and services in Zimbabwe rose by at least 170percent last month. Low-income families were experiencing "difficult times, as shortages of basic commodities continue and price adjustments occur daily", the Consumer Council of Zimbabwe (CCZ) said as the inflation figures were released. Inflation reached 613 percent at the end of January, and last month's record hike drove the annual rate to its current 782 percent.

Economist John Robertson explained that "the increase in prices of goods and services has been driven by the scarcity of foreign exchange". The latest increase makes it mathematically impossible for Zimbabwe to achieve the target of double-digit inflation by the end of 2006, set by Reserve Bank Governor Gideon Gono. Acting CSO director Moffat Nyoni attributed the latest rise partly to the Reserve Bank, which had reset exchange rates. "If the exchange rate had been allowed to fall in line with inflation, monthly [inflation] figures would have been higher over the last year, but last month's figure would have been lower," he said. “Rent, transport, college and tertiary fees contributed the highest to the annual inflation figure," Nyoni said.

According to Robertson, the biggest increases were recorded in school fees, which soared by 1,263.6 percent, and rent, which climbed by 157.3 percent. The annual inflation rate for food and non-alcoholic beverages was 226 percent, while for non-food items it was 273.9 percent. From Z$21million in January, the expenditure basket for a family of six had shot up by at least Z$7million to $28million in March, the consumer council noted. "The increase was largely propelled by ... both food and non-food items, following last month's increase in bread prices and the devaluation of the local currency".

Teachers generally earn Z$9 million a month, while domestic workers get an average monthly wage of Z$2 million. The CCZ said the price rises could also be partly attributed to the "prevalence of the black market, which gives ready access to commodities such as sugar, cooking oil, mealie-meal, flour, soap and fuel, which have disappeared off the formal market." The economic difficulties are further amplified due to unemployment reaching over 70 per cent. Large numbers of people are reported to be leaving the country to find jobs and income in nearby states.

For most of its 26 years of independence, Zimbabwe was seen as a prosperous country in southern Africa. Today the United Nations predicts that more than five million Zimbabweans, about a third of the population, will need food aid this year. And foreign aid has dried up due President Mugabe’s skewed economic policies. Just this week the International Monetary Fund refused to extend technical assistance to Zimbabwe over long overdue obligations to the world lender.

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