A Numbers Game

Many of you will know of Zimbabwe’s challenges with inflation over recent years. A number of years ago, I was shown a 25,000 Zim Dollar note. It had an expiry date on it! At the time, it would not have even purchased a loaf of bread. A few years later, and they had produced a 1 billion dollar note. Again it would not have bought a loaf of bread!! How did people function in such an environment? They spent money as soon as they got it. Now they use the US dollar for their currency (not sure I understand how that works).
 

Fortunately here in Malawi we haven’t reached that stage. But prices are rising steadily. In the last year alone, the price (MK = Malawi Kwacha) of some basic items has risen sharply. For example,

-          Petrol has increased from 230MK to 380MK per litre (about $2.20), and is still in short supply

-          Bread has doubled in price from 110MK to 225MK per loaf

-          Milk powder has risen from 200MK to 350MK for a 125g box (we supply these in our HOPE for AIDS home based care program)

-          Cement has more than doubled from 2000MK to over 4000MK per 50kg bag

Not everything has risen so sharply though. For instance, the value of the Aussie dollar has only jumped from 148MK to 172MK in the same period.

 

Malawi’s economy is now governed by a Zero Deficit Budget, so this means it is harder to get tax concessions on items. The Likuni Phala (Fortified maize porridge) that is used by our HBC and OVC programs, is no longer eligible for surtax exemption, and together with increased prices, it too has doubled in price in the last 12 months.

 

And the price of items varies markedly across different stores – sometimes by more than 50%. So as you do a one shop stop in the supermarket (or at least at the same shopping mall) spare a thought as we move between markets and half a dozen stores to get our staple foods.

But we are fortunate – we have food on the table every day, with money spare for treats – many families struggle to live on barely a few dollars each day, and don’t know where they will get the money for their next meal. One family came to us the other day seeking 2000MK ($12) to see them through to the end of the month.