High levels of acute food insecurity and assistance needs are expected to persist into early 2021

• Although food security outcomes are better than previously anticipated in areas of the country, high humanitarian food assistance needs persist and are expected through at least early 2021. Despite the harvest, Crisis (IPC Phase 3) outcomes are expected across the southern, western, and extreme northern parts of the country throughout the outlook period due to below normal access to both food and income. Humanitarian assistance is currently improving outcomes to Stressed! (IPC Phase 2!) in some areas of the country.

• Outcomes in some typical surplus-producing areas in the north are better than previously anticipated, with Minimal (IPC Phase 1) present and expected from June to September. As livelihoods in these areas are mainly crop dependent, the somewhat favorable crop production and access to income, while below normal, is sufficient for poor households to meet their minimum food and some non-food needs. From October through January, Stressed (IPC Phase 2) outcomes are expected in surplus-producing areas as food stocks dwindle or are depleted and households are reliant on markets for food. Urban areas are currently in Crisis (IPC Phase 3) although Stressed (IPC Phase 2) outcomes are expected as the informal sector restarts following the lifting of COVID-19 restrictions and the economy slowly dollarizes.

• Economic volatility and depreciating parallel market exchange rates are progressively constraining livelihoods and disposable incomes. The official annual inflation rate in May stood at 786 percent and the local currency depreciated by over 80 percent between May and mid-June. In late June the government shifted from a fixed official foreign exchange system to a new auction system.  However, volatile macroeconomic conditions are anticipated throughout the outlook period.  

• COVID-19 related measures continue to constrain access to food and income for market dependent households even as government has progressively relaxed some restrictions. In mid-June, the informal sector re-opened on the condition operations register with local authorities and COVID-19 control measures are observed. National borders remain closed except for essential goods and services; inter-city and rural-urban transport services remain banned. The number of confirmed COVID-19 cases continue to increase driven mainly by returning citizens from South Africa and Botswana.

• The 2019/20 official maize production estimates are about 30 percent below average. In response to inflationary pressures, in April the government increased maize and small grains producer prices by about 80 percent, followed by a 30 percent incentive for deliveries through the end of July. Maize grain and maize meal imports mainly from South Africa continue although local supplies remain low. Shortages of some basic food items mainly maize grain, maize meal, sugar and cooking oil continue across most markets. Maize grain and maize meal prices are projected to remain significantly above average throughout the outlook period.

Current Situation

The continued deterioration of the macroeconomy remains a key driver of acute food insecurity. This has been compounded by widespread impacts associated with COVID-19 measures taken by the government as well as consecutive years of drought and poor harvests. The confirmed number of COVID-19 cases continues to increase, with 591 cases as of June 30, up from just 30 at the beginning of May. Seven associated COVID-19 deaths have been recorded. Most of the confirmed cases are associated with returnees from South Africa and Botswana.

In mid-May, the government indefinitely extended Level 2 lockdown measures including the closure of national borders except for essential goods and services and the ban on inter-city and rural-urban public transport services. Formal businesses resumed operations although with strict COVID-19 precautionary measures. Many businesses have been affected, either reducing operation times and staffing, and/or decreasing wages or salaries. Prior to COVID-19, most incomes earned in the formal sector were well below the poverty line.

According to the IMF in 2018, Zimbabwe was the second most informalized economy in the world after Bolivia. Until mid-June, most informal sector activities remained banned, besides main urban produce markets, operating under restricted hours. Informal cross border trade, remittances, mainly with South Africa, a key trade partner, remained constrained. IOM reported regular cross-border movement at the Beitbridge border post decreased by 95 percent from March to April/May. The disruption of informal sector activities has severely affected rural and urban household incomes given that these makeup about three-quarters of national employment according to ZIMSTAT.

In mid-June, the government announced informal sector activities could resume operations after registering with local authorities and meeting COVID-19 containment conditions. As such, there has been some increase in informal sector activities, though rather slowly. Some local authorities are yet to set up new/refurbished market sites and many households lack the capital to resume business. Other activities like informal cross-border trade remain banned. The continued travel restrictions and ban on privately owned public transport for rural-urban and inter-city routes are compounding the situation for the informal sector.

Macroeconomic conditions continue to be volatile. ZIMSTAT reported annual inflation for May at 786 percent, up from 766 and 676 percent in April and March, respectively. From early May to mid-June, the local currency depreciated by over 80 percent against the USD, climbing from around 50 ZWL/USD to 90 ZWL/USD (Figure 2). The Reserve Bank of Zimbabwe (RBZ) has instituted several measures in attempts to calm the parallel market exchange rates. Notably, in late June the RBZ abandoned the fixed official interbank rate of 25 ZWL/USD which prevailed from March. This was replaced with a weekly auction system determining the official weekly foreign exchange rate. The first foreign exchange auction occurred on June 23, with the official rate set at about 57 ZWL/USD, which was more than double the previous official rate but about 40 percent lower than the of prevailing parallel market rates.

With the new exchange rate, the government immediately announced new fuel prices resulting in a 150 percent increase in fuel prices, which had already increased 30 percent in early June. Fuel price increases have pushed up prices of other commodities and services. Moving forward, fuel prices will be reviewed following the foreign currency auctions on a weekly basis.

Spiking parallel market exchange rates are the main driver of volatile and sharp increases in the prices of goods and services. ZIMSTAT reported a 14 percent increase in the food poverty line^[1] and the total poverty consumption line^[2] from April to May. The April increases were 22 percent and 16 percent above March levels, respectively. The Consumer Council of Zimbabwe (CCZ) indicated the cost of living for an average urban household of six rose 22 percent between April and May. The CCZ calculated food basket increased 35 percent over the same period. Unfortunately, household incomes for most poor households are relatively stagnant and have not increased with the cost of living.

In the month of June, commodity prices recorded their highest increase compared to recent months. Sugar, bread, and cooking oil prices almost doubled compared to May prices. High price increases are also being driven by critical shortages of some basic commodities such as maize meal, cooking oil, and sugar. Most goods and services are increasingly being priced in USD. This is further constraining access to market foods as many poor households do not have access to USD. At the same time; however, those households with access to USD especially in the urban informal economy are expected to increasingly use this foreign currency, improving market access. Purchases especially on informal markets made using mobile money incur fees up to 50 percent more than when using local cash (bond notes and coins and new ZWL notes), which are scarcely available. Anecdotal information indicates bond notes and coins are increasingly being rejected across some markets.

At the start of the 2020/21 consumption year in April, Zimbabwe had nearly no carryover stocks from last season’s harvest. The 2020 Second Round Crop and Livestock Assessment estimates total maize production at about 908,000 MT (Figure 2), which is nearly 20 percent above last year, but 30 percent below the five-year and ten-year averages. The government estimates the national food deficit (inclusive of pulses and legumes) to be nearly 1.2 million MT for the 2020/21 marketing and consumption year, although some independent estimates indicate a deficit of over 1.0 million MT for maize only. Official production estimates for other crops, such as pulses and legumes are above last year’s production, but also below average.

Production in typical deficit-producing areas was very poor and in worst-affected areas, some households did not harvest due to total crop failure or having not planted at all. The government estimates only 12 of the 60 rural districts in the country harvested maize grain that will last up to 3 months. However, in other areas, government production estimates are somewhat better than what was previously anticipated. Many of the districts’ harvest is expected to meet self-sufficiency for four to six months; some surplus-producing districts had a harvest that is expected to last 10 or more months.

Tobacco sales started at the end of May, a month late due to COVID-19 precautions. Farmers were concerned with the loss of potential earnings as payment was half in USD and half ZWL, with the ZWL portion pegged to the then fixed-rate at 25 ZWL/USD. As a result, some farmers reportedly withheld their crop from the markets. Deliveries are likely to increase now with the introduction of the foreign exchange auctions. The Tobacco Industry and Marketing Board (TIMB) projects this season’s output at 225 million kg down from last season’s all-time high of 259 million kg. The sale of tobacco is improving incomes for farmers and communities in tobacco-producing areas mainly in the Mashonaland and Manicaland Provinces.

In mid-June, the government announced the new cotton producer price of about 44 ZWL/kg, paid partially in USD, although mostly in ZWL. Farmers are requesting to be paid more in foreign currency. The government estimates cotton production will be about 32 percent above last season’s production. Cotton is a notable income source, especially in some food deficit-producing areas. 

Water availability and access remain limited following the poor 2019/20 rainfall season in traditional low rainfall areas of Matabeleland, Masvingo, and parts of Manicaland and Midlands Provinces, as well as the extreme northern parts of the Mashonaland Provinces. Pasture and vegetation conditions never fully regenerated in such areas and are currently poor (Figure3). As a result, livestock body conditions, mainly cattle, are generally poor; however, goats are in good condition. Water and pasture availability in northern areas where rainfall was relatively better, is fair to good, as are livestock conditions. Water access is limited in some urban centers across the country. In one of the worst-affected cities, Bulawayo, reservoirs are significantly below normal. For most parts of the city, water is available just one day a week. The city recorded over 10 deaths attributed to water-borne diseases in one of the high-density suburbs in mid-June.

Maize grain supplies on the markets across the country remain low due to below normal harvests. Significant maize grain imports continue to be recorded mainly from South Africa, an atypical occurrence during this time of the year. This maize grain is likely to be mostly targeted for commercial maize meal production. Grain flows from surplus-producing to deficit-producing areas are very limited. There are also standing restrictions to the amount of grain that can be transported freely, except if destined to the GMB. This is further compounded by current COVID-19 related travel and public transport restrictions and high transportation costs.

The Grain Marketing Board (GMB) started receiving grain from some farmers mostly in surplus-producing areas. The GMB increased the maize and small grain producer prices in response to mounting inflation. In April, maize and small grain producer prices were increased by 77 percent and 85 percent, respectively. At the end of May, the government announced a further 30 percent increase to farmers who deliver grain by the end of July. With maize grain now selling at about 16,000 ZWL/MT and small grains at 16,700 ZWL/MT, these prices are over 10 times than at the same time last year. In order to appeal more to farmers, the GMB has promised payments in 2 to 3 days. Private buyers are reportedly paying less than the GMB prices – attracting some farmers through immediate payments in cash.

Shortages of maize meal continue in the markets as government-subsidized maize meal (sold at 70 ZWL/10kg) is not readily available due to shortages of grain supplies to millers. Unsubsidized unrefined maize meal is rarely available in supermarkets and other retail outlets, although when available prices are up to five times the price of subsidized commodities. Some commercial millers are producing mainly refined brands which are very expensive for most poor households. The situation is most critical in remote rural areas which hardly receive subsidized maize meal. In urban areas, some poor households are coping by buying small quantities (tutsaona) of maize meal and other basic foodstuffs on the informal markets enough for one or a few meals. In view of the critical maize meal situation, the government in May lifted the maize meal and wheat/flour import duty to allow for more stocks into the local markets.

Incomes from crop and livestock sales for this time of the year are below average, especially in deficit-producing areas. Agricultural and non-agricultural labor opportunities are also below-normal following the poor harvests as well as the challenging macroeconomic context and COVID-19 related restrictions. Some households are engaging in petty trading, vegetable productions and sales, and self-employment. In some areas, household members are engaging in informal mining enterprises, while others sell wild products such as grass and fuelwood to earn income. Labor rates, including in-kind payments, are below average as payment capacity for middle and better-off households is also limited. Remittances both from abroad and domestic, mainly from urban to rural areas, are below-average. Poor households, many of whom had limited to no harvests are having difficulty accessing market foods due to below-average incomes and atypically high food prices. 

Government efforts to cushion vulnerable households and businesses affected by COVID-19 are reportedly being affected by resource challenges. Around 200,000 households were reportedly targeted to receive 300 ZWL/month/household from April to June. Businesses across various sectors affected by COVID-19 are reportedly also targeted for assistance with low-interest loans. WFP extended the 2019/20 Lean Season Assistance to reach about 1.5 million rural people in May with similar levels of assistance in June, meeting about 60 percent of a household’s kilocalorie needs. 

In some typical surplus-producing areas, food security outcomes are better than previously anticipated and better than last-year as household access not only to food, but also to incomes have improved as crop production was better than last-year and larger than previously anticipated. While production was not typical, it is still supplying most poor households with enough food for consumption of own foods. Household livelihoods in these areas are heavily reliant on crop production and labor, which is facilitating the access to income through crop sales, self-employment activities, and petty trade for households to meet their non-food needs. Additionally, some households are earning income through vegetable production and sale. As a result, Minimal (IPC Phase 1) outcomes are present, while some areas where production was slightly lower and access to income sources are somewhat poorer, Stressed (IPC Phase 2) outcomes are present.

Humanitarian assistance is improving food consumption in some areas of the country and Stressed! (IPC Phase 2!) outcomes are present. However, elsewhere across typical deficit-producing areas in the south, west, and extreme north, households are employing consumption-based coping strategies including decreasing the number of meals consumed a day to one and reducing portion sizes. As a result, Crisis (IPC Phase 3) outcomes are present in these areas.

In urban areas, Crisis (IPC Phase 3) outcome currently prevail following the stringent restrictions on informal sector activities up till mid-June as well as basic commodity shortages and above-average prices.