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Zimbabwe household incomes lag despite economic stability
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Despite relative stability in exchange rates, most Zimbabwean households continue to face low purchasing power, with incomes from typical livelihood sources remaining below average, a new report reveals.
Over the past few months, both formal and parallel foreign exchange rates have remained fairly steady, largely due to Reserve Bank of Zimbabwe (RBZ)'s tight monetary policy. This contributed to an annual inflation rate of 3.8% in February, down from 4.1% in January, while US dollar–based inflation fell to 0.9% from 1% the previous month.
While macroeconomic indicators suggest relative stability, poor households continue to struggle to access essential goods. Low earnings from common livelihood sources such as food crop sales, casual labour, remittances, petty trade, and the sale of wild products, including Mopane worms, have limited household purchasing power.
"Macro-economic stability has been sustained since early 2025. Formal and informal exchange rates have remained relatively steady, driving stable prices, with the premium between the formal and informal exchange rates now less than 20 percent, compared to nearly 100 percent in September 2024 when the local currency was devalued," the Famine Early Warning Systems Network (Fews Net) said in its latest food security update.
Month-on-month inflation averaged 0.4% in 2025, according to the Zimbabwe National Statistics Agency, a trend described by the Confederation of Zimbabwe Industries as "sustained economic calm."
However, the report notes that seasonal agricultural labour demand is unusually low due to limited liquidity among wealthier households, reducing their ability to pay workers. In-kind payments in crops or commodities are also scarce, while weather conditions—above-average rainfall in January followed by a dry spell from late January to February—further constrained labour opportunities.
On a more positive note, informal artisanal and small-scale mining, particularly gold mining, is generating above-average income. The informal sector has increased its contribution to national gold sales, buoyed by rising global gold prices, offering some respite for households engaged in this activity.
The report underscores the gap between macroeconomic stability and household realities, highlighting that while national indicators may appear steady, many Zimbabweans continue to grapple with low earnings and limited access to basic goods and services.
Over the past few months, both formal and parallel foreign exchange rates have remained fairly steady, largely due to Reserve Bank of Zimbabwe (RBZ)'s tight monetary policy. This contributed to an annual inflation rate of 3.8% in February, down from 4.1% in January, while US dollar–based inflation fell to 0.9% from 1% the previous month.
While macroeconomic indicators suggest relative stability, poor households continue to struggle to access essential goods. Low earnings from common livelihood sources such as food crop sales, casual labour, remittances, petty trade, and the sale of wild products, including Mopane worms, have limited household purchasing power.
"Macro-economic stability has been sustained since early 2025. Formal and informal exchange rates have remained relatively steady, driving stable prices, with the premium between the formal and informal exchange rates now less than 20 percent, compared to nearly 100 percent in September 2024 when the local currency was devalued," the Famine Early Warning Systems Network (Fews Net) said in its latest food security update.
However, the report notes that seasonal agricultural labour demand is unusually low due to limited liquidity among wealthier households, reducing their ability to pay workers. In-kind payments in crops or commodities are also scarce, while weather conditions—above-average rainfall in January followed by a dry spell from late January to February—further constrained labour opportunities.
On a more positive note, informal artisanal and small-scale mining, particularly gold mining, is generating above-average income. The informal sector has increased its contribution to national gold sales, buoyed by rising global gold prices, offering some respite for households engaged in this activity.
The report underscores the gap between macroeconomic stability and household realities, highlighting that while national indicators may appear steady, many Zimbabweans continue to grapple with low earnings and limited access to basic goods and services.
Source - newsday
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