Poor economy and consecutive droughts drive near-record level humanitarian assistance needs

Atypically high humanitarian needs are present in Zimbabwe as the country continues to face one of its worst food security emergencies on record. This is a result of the poor macroeconomic conditions and consecutive years of drought. Across much of the country, four out of the last five rainfall seasons have been poor with the last three consecutive seasons considered as drought in areas of the country. This has led to the progressive erosion of livelihood options and productive assets especially among poor households. The very poor macroeconomic conditions are extremely limiting household purchasing power and access to food on the markets.  

Through early February, cumulative rainfall from start of the 2019/20 season was significantly below normal with the October to December period (Figure 1) among the driest for this period on record in western, northern, northeastern and southeastern areas. Due to poor access to crop inputs as well as the drought conditions during the first half of the season, area planted for most crops are significantly below average.

Heavy rainfall was recorded across much of the country in early February with some areas receiving more than 100 mm of rain in 24 hours. Flooding was reported in parts of Binga, Centenary, Mbire, and Chimanimani Districts. Some infrastructure such as roads and bridges were damaged with some households losing property, crops and livestock. As a result of the widespread heavy rains, rainfall deficits have decreased across the country. By late-February, cumulative seasonal totals were normal to above normal in most places. This favorable rainfall has resulted in some improvements in crop conditions in the Mashonaland Provinces and other high production areas.  The bulk of the crop is at vegetative to early reproductive stages. However, in southern, western and other parts of the country, crop conditions remain poor. In addition, pests including Fall Armyworm have been reported across parts of the country. Many poor households cannot afford to purchase pesticides on the market.

The harvesting and curing of early planted (mainly irrigated) tobacco have started. Area planted for tobacco is below average due to poor rainfall and access to inputs.

Water availability and access for domestic, livestock, and other livelihood uses remain at low levels across most typical low rainfall areas. Some seasonal streams, rivers, ponds and dams remain dry and water tables continue to recede impacting deep well and borehole water levels. As of February 13, the Zimbabwe National Water Authority reported national dam levels were on average about 50 percent full compared to the typical 60 to 70 percent for this time of year. Some irrigation systems are facing water challenges as a result of the drought conditions, compounded by electricity and fuel shortages.

As a result of the largely hot and dry conditions prior to the February rainfall, the Normalized Difference Vegetation Index (NDVI) is significantly below the median across the country (Figure 2). Pastures remain poor in most southern, western, and other low rainfall areas. Over 50,000 cattle deaths, which is atypically high for this time of year, have been recorded nationally between October 2019 and January 2020 with Matabeleland South and Masvingo Provinces being the worst affected. Most households cannot afford the cost of veterinary drugs on the markets. In some areas, livestock are still walking long distances to water points, and dipping services are very irregular due to inadequate or lack of water and chemicals. Goats are in fair to good condition, as they are primarily browsers rather than grazers. A high proportion of households across parts of the country lost chickens to Newcastle in the last few months.

Cattle prices in US Dollar (USD) terms are significantly below average as a result of low demand, poor livestock conditions, and increased supply in some areas as some households continue to atypically sell livestock that are in poor condition. Relative livestock prices in Zimbabwean Dollar (ZWL) terms are high and increasing due to high inflation rates and the devaluation of the local currency.

The macroeconomy continues to be volatile with deepening challenges impacting rural and urban livelihoods and food access, particularly for poor households. Foreign currency at banks and other formal markets remain in critical short supply. The Zimbabwean Dollar (ZWL) devaluation continues with the ZWL to USD official interbank and parallel market rates devaluing by over 580 percent since February 2019 (Figure 3).

The parallel market exchange rates continue to drive the pricing of goods and services in the formal and informal markets. Amidst persistent shortages, the black market is the primary source of the ZWL where the market attracts rates 35 to 50 percent more than the use of electronic and mobile money transfers. There is a high demand for ZWL or its equivalent bond notes in cash and coins on the black market as most goods and services are mainly offered in cash or at significantly higher prices using electronic and mobile money. The multi-pricing system (USD, ZWL, electronic and mobile money transfers) as well as speculative pricing are driving further volatility on the local markets. As ZWL cash shortages continue, some goods are increasingly being sold only in USD on the black market.

In mid-February, the Reserve Bank of Zimbabwe announced measures aimed at stabilizing the economy with a key element to reinforce the use of the local currency (de-dollarization). However, the parallel markets and sections of the formal markets continue to prefer and use the USD, affecting the majority of households whose incomes are in the devaluing local currency (ZWL).   

Annual inflation calculated by independent analysts was estimated at +/- 500 percent both for December and January. Prices of goods and services continue to escalate, impacting mostly poor households in both rural and urban areas. Fuel prices continue to increase on a regular basis, driving up transport costs and prices on the markets. At the same time, fuel shortages are still affecting business operations and increasing costs. The high cost of electricity as well as frequent electricity cuts continue to impact mainly urban households who are resorting to more expensive alternatives such as fuel wood and gas. The significant increase in school fees and related needs in the new year is putting additional pressure on poor households’ incomes, directly and indirectly impacting food access. 

National cereal stock levels are critically low. As of mid-January, the Grain Marketing Board’s Strategic Grain Reserves reportedly held less than 100,000 MT of maize grain compared to the mandatory minimum of 500,000 MT. The government’s maize grain/maize meal subsidy scheme to millers is facing implementation challenges resulting in widespread national maize meal shortages across urban and rural markets.  Maize meal is mainly available on the black market at prices double/triple the subsidy price and out of reach of poor households. Amidst these shortages, formal (government and private sector) maize imports are reportedly increasing especially from South Africa (Figure 4) in response to the national maize meal shortages. Despite the reported increase in both formal and informal imports the demand for maize and maize meal is so high that there has been little effect on local markets.

In mid-February, the government increased the maize meal subsidy price from ZWL 50 to ZWL 70 per 10 kg bag in view of higher costs of imported grain. The government has also announced plans to introduce a maize meal coupon system targeting vulnerable populations enabling them to buy subsidized maize meal on the market; however, the implementation specifics are not yet known. At the end of February, government announced an increase in producer prices for maize and small grains from 4,000 ZWL/MT to 6,958 and 7,260 per ZWL/MT, respectively. This is meant to attract grain deliveries to the GMB for the coming harvest.

The January average maize grain prices across FEWS NET sentinel markets remained over 1,000 percent above the same time last year and average prices (Figure 5). This was driven by the prevailing macroeconomic challenges, speculative pricing, low supply, high demand, and anticipation of a poor 2020 harvest. Other basic commodities such as rice and flour which act as substitutes for maize and small grains are available in retail shops although exorbitantly priced beyond the reach of the poor.

Most typical livelihood activities remain below normal, and poor households are stretching their usual and new coping options to access food including the sale of wild products, engaging in petty trade, borrowing, or informal mining. The poor economic situation is negatively impacting opportunities and incomes from activities such as casual labor, self-employment, livestock sales, petty trading, remittances, and artisanal mining, among others. Vegetable production and wild product sales and consumption are also unusually low due to consecutive poor rainfall seasons. Incomes from urban informal employment are very irregular and below average. Labor migration is increasing for members of some households in both rural and urban areas. Cross border trading is common with all neighboring countries although mainly South Africa, though the lack of capital and reduced demand for products are limiting income from this source.

Based on the historical nutrition surveys conducted from 2015, the national median prevalence of acute malnutrition based on weight-for-height z-score (WHZ) is 3.38 percent and from the May 2019 ZimVAC rural assessment was 3.6 percent. This GAM prevalence is within the “acceptable” range according to the WHO Classification.  

Due to critical grain shortages and foreign currency shortages for maize imports, government’s typical lean season food assistance program is at below normal levels. Significant resource gaps are also being experienced by partners. The World Food Programme (WFP) reached 2.6 million rural people out of a planned 3.9 million in January. WFP plans to scale up assistance to 3.6 million rural people in February. The shift from the initially planned mix of cash and in-kind assistance to purely in-kind transfers resulted in some delays in food distributions in some areas.

Currently areas receiving significant humanitarian assistance are experiencing Stressed! (IPC Phase 2!) as a result of improved food consumption. In areas not receiving significant assistance, most households are employing consumption based coping strategies including the skipping of meals, reduction in portion sizes, selective and preferential feeding of the young, and consumption of less preferred foods such as wild vegetables. Additionally, households are employing livelihood coping strategies that are indicative of Crisis (IPC Phase 3). As a result, these areas are in Crisis (IPC Phase 3). In some areas with no or insignificant humanitarian assistance, it is likely that some households are experiencing Emergency (IPC Phase 4) outcomes. The households facing these outcomes are likely to be very poor households that had a limited harvest in 2019, with limited incomes, and are reliant on coping activities such as borrowing or begging for food.

Assumptions

The February to September 2020 most likely scenario is based on the following national-level assumptions:

• Despite the heavy rains in February, cumulative rainfall for the October to March 2020 period in Zimbabwe will most likely be below average especially in the southern and western areas.
• The green harvest is expected to start in February/March and will be below average levels.
• The 2019/20 national cereal harvest is expected to be below average and likely close to the harvest following the 2015/16 El Nino drought as a result of the poor rainfall season and continued below average access to agriculture inputs. National maize grain and maize meal supply for the outlook period are expected to be below average.
• Government and private sector formal maize imports are likely to remain significantly below average as a result of limited foreign currency. Informal imports of maize grain and maize meal are expected to continue throughout the outlook period; however, these will also be at below average levels.
• As a result of consecutive droughts, water availability and access are expected to be below normal, especially in typical semi-arid areas. This will negatively impact livelihood activities such as gardening, brick molding and construction, livestock watering, and fishing.
• The start of the 2020 tobacco selling season are yet to be announced although it is expected to start in March. Farmers are calling for improved payment arrangements, allowing them more access to foreign currency receipts. However, due to the below average area planted, incomes from this source will most likely be below average. Incomes from cotton are also expected at below average levels.
• Pasture conditions across typical low rainfall areas are not expected to fully regenerate and will most likely remain below average. Livestock, particularly cattle, are expected to remain in poor condition; however, in northern areas livestock conditions are expected to improve to fair and good conditions through August/September. A high prevalence of livestock diseases is expected to continue with some households losing some cattle due to drought and disease. Small livestock are expected to be in good to fair condition but deteriorating in critical areas.
• Livestock sales are expected to prevail at below normal levels across most parts of the country, especially in typical arid areas, due to poor animal conditions and low demand. Terms of trade will be unfavorable for poor and other households disposing of livestock to access food due to below average livestock prices relative to rising maize grain and maize meal prices.
• Prevailing poor and volatile macroeconomic conditions are expected to continue, including foreign and local currency shortages. The high and constantly increasing foreign and local currency exchange rates on the parallel market are expected to remain the key drivers to high prices on the markets. The multi-tier pricing system will most likely continue. As a result, some basic food commodity shortages (mainly maize meal) are expected to continue. Fuel shortages and high transportation costs increases are also likely to continue.
• Agriculture and non-agriculture labor availability is expected to be significantly below average due to reduced demand for labor. Additionally, labor rates are expected to be below average as labor supply will be above average as an atypically high number of people are expected to be seeking such opportunities. As a result, income from labor is expected to be significantly below average, specifically in typical deficit producing areas.
• Most other typical livelihood options will remain constrained throughout the outlook period. Inter- and intra- rural and urban distress labor migrations for some household members are expected to increase, with some members crossing the borders mainly to South Africa.
• Local (in-country) remittances will remain below average throughout the outlook period due to constrained livelihood opportunities, poor payment rates, and the high cost of basic goods. External remittances from mainly South Africa will also be generally below average; however, a small proportion of households will likely see an increase in remittances.
• Maize grain and maize meal prices are expected to remain significantly above average and continue to increase as the result of low supply, high demand, and high inflation. Prices are expected to increase between now and September by over 50 percent. Very high and increasing transportation costs are anticipated to further increase prices especially in remote markets. The black market will likely remain the main source of maize meal at exorbitant prices.
• WFP plans to reach an estimated 2.6 million people in February and 3.5 million between March and April with households receiving about 60 percent of their kilocalorie needs per month through assistance.

Most Likely Food Security Outcomes

Most typical food and income sources are expected to remain low during the period February to May, including casual labor and livestock sales. Green consumption will be below normal in most areas. The main harvest will be delayed, starting around April/May, and will also be below average. Poor food consumption is expected among poor households in both surplus and deficit producing areas. The national prevalence of acute malnutrition is expected to increase somewhat beyond both average (3.38) and the current (3.6) levels. Some localized areas are expected to deteriorate to levels indicative of “poor” according to the WHO classification scale (GAM 5-9.9%), however the national prevalence of malnutrition will likely remain less than 5 percent. Humanitarian food assistance is expected to maintain Stressed! (IPC Phase 2!) outcomes across much of the country through April. However, Crisis (IPC Phase 3) outcomes are anticipated in areas not receiving any assistance or receiving insignificant assistance.

From June through September, some poor households, especially in high-producing areas of the country are expected to consume own-produced foods. However, own-produced crops will most likely be limited in deficit areas in the south, west, and other parts of the country. In typical deficit areas, poor households with a harvest are expected to realize up to only 2 months for own supply. There will be households in these areas that are expected to have no harvest at all. Own-produced foods are anticipated to last 2 to 4 months for poor households in typical surplus areas. This will stabilize food security for a limited time. Reliance on markets will be atypically above average during this period; however, food access will be poor due to significantly below average purchasing power.

There is likely to be an increase in the GAM prevalence during this outlook period. More areas will likely move into “alert” (GAM 5-9.9%) per the WHO classification scale, which will lead to the national GAM prevalence possibly entering the “alert” level as well. Most deficit producing areas are expected to be in Crisis (IPC Phase 3) in the post-harvest period. Some surplus/high-production areas e.g. parts of the Mashonaland Provinces will likely experience Stressed (IPC Phase 2) as poor households consume own-produced stocks between June and July; however, beginning in late-August Crisis (IPC Phase 3) outcomes are anticipated to emerge. Some households in deficit producing areas that did not have a harvest will face large food consumption gaps and will engage coping strategies that result in significant assets depletion. Some worst-affected poor households with no harvest and limited access to incomes reliant on markets for food are expected to be in Emergency (IPC Phase 4).

Due to the consecutive poor seasons resulting in very poor consecutive harvest and the likely continued deterioration in the macroeconomy, food assistance needs in Zimbabwe will remain atypically high throughout 2020.

Events that Might Change the Outlook

Possible events over the next eight months that could change the most-likely scenario.