Zimbabwe has strong foundations for accelerating future economic growth and improving living standards. The economy has excellent human capital, comparable to that of upper-middle-income economies in Sub-Saharan Africa, although some skill shortages are emerging in some sectors. Moreover, Zimbabwe possesses abundant mineral and natural resources that, if well managed, can support the country’s development objectives.
In recent weeks, Zimbabwe has experienced a new wave of price hikes for essential goods, with the government attributing the phenomenon to unscrupulous businesses aligning their pricing with parallel market rates. To combat rising prices, the government has recently eliminated duties and taxes on imported basic goods.
Currently, the official RBZ exchange rate is trading at ZWL$ 2 577.0564 against the US dollar. This indicates that the official rate has declined by 140.8% from the opening rate of ZWL$ 1 070.4171 as of 2 May 2023. This sharp decline was caused by the excess demand for foreign currency and typically, a country with a consistently higher inflation rate exhibits a depreciation in its currency, as its purchasing power decreases relative to other currencies. The month-over-month inflation rate in Zimbabwe increased by 15.7 % in May 2023 from 2.4% in April and this has been the most since July 2022.
The parallel market rate is currently trading at ZWL$ 4 500 against the US dollar, and it has also decreased by 80% against ZWL$ 2 500 which it was trading at on 2 May 2023. This rapid movement of the parallel market rate was due to the expectations of increased foreign currency supply in the market when the tobacco marketing season opened, however the supply of USD was lower than anticipated.
According to market researchers, it can then be seen that at the beginning of the month, there was a margin difference of about 134% between the RBZ exchange rate and that of the parallel market, but as of 30 May, it can then be shown that the margin difference has shrunk to about 74.6%. This then shows that the official market is moving rapidly closer to the parallel market rate. The parallel market rate has a 25% increment since last week`s rate of ZWL$ 3 600 but the official rate has increased by 36.5% from ZWL$ 1 888.0119 last week.
- Prevailing Monthly Basic Salaries, Base Salaries, and Total Packages.
- How companies have implemented and adopted remuneration split models.
- Tax implications on paying salaries using a blend of USD and RTGS currency.
- Remuneration structures for blended salaries.
- Company vehicles with regards to : (a) school fees (b) medical aid (c) motor vehicles and more ..........
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