Poverty datum line rises

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Zimbabwe’s poverty datum line (PDL) increased to $7 426 in April from $6 421 in March, the Zimbabwe National Statistics Agency (Zimstat), revealed on Monday.

The data shows that financial requirements for a family of five to live a basic comfortable life and not be deemed poor continued to go up while the economy is under a Covid-19 lockdown. Given that year-on-year inflation for April was 765 percent, indications are the PDL for May is likely to surge forward.

“The Total Consumption Poverty Line for one person during the same period was $1 485,16 while that for an average of five persons per household stood at $7 425,81,” Zimstat said.

The rise in the cost of living reflects the impact of inflation caused mainly by exchange rate instability which has seen the local currency lose its value against the United States dollar.

While Government fixed the exchange rate at $25 to US$1, prices, due to shortages of foreign currency on the official market, are largely influenced by the parallel market where the rate is over $60 per greenback. The International Labour Organisation (ILO) recommends that the PDL should be used as a benchmark or reference point in determining minimum wages.

However, in the current environment, wage growth is lagging behind inflation and employers and workers are up in arms over salaries and wages adjustment.

Most workers’ salaries are about half the PDL, leaving them struggling to make ends meet.

The situation for both Government and private companies has been compounded by the current Covid-19 lockdown that has forced companies to scale down operations, lay off some workers or cut their salaries. The lockdown is aimed at curbing spread of the deadly disease.

Global value chains have also been affected as countries closed their borders to foreigners while some passenger airlines have been grounded save for cargo. Given the interdependence created by globalisation, many countries will struggle for a long time to be self-reliance post Covid-19.

Analysts say Covid-19 has exposed many countries that were over reliant on China, and, moving on, authorities should come up with sustainable home grown solutions to handle national economic challenges.

Zimbabwe stands to benefit post Covid-19 given that its agriculture has not been decimated by the effects of the coronavirus. — New Ziana-Herald Reporter.

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