Poor harvests and increasing economic hardships lead to high humanitarian assistance needs

• Crisis (IPC Phase 3) outcomes persist across much of the country. This is mainly due to depleted household food stocks and to access food households rely on markets with significantly below average purchasing power amidst atypically high and increasing prices. Humanitarian food assistance reached some of the worst drought-affected areas of the country in October. As a result, Stressed! (IPC Phase 2!) outcomes are present in some of these areas. The assistance is expected to be scaled-up during the peak of the lean season resulting in Stressed! (IPC Phase 2!) outcomes continuing in targeted areas.

• Critical shortages of foreign currency in the formal sector continue to drive increases in parallel market exchange rates. This is in turn fueling persistent increases in the costs of basic goods and services, including staple foods. By late October, the local currency was valued at approximately 15.5 ZWL/USD on the official interbank market, about 14.0 percent of its value in February 2019, when the interbank market was introduced. This marks over a 520 percent depreciation of the local currency with higher rates on the parallel market. The depreciation of the local currency (RTGS or ZWL) against the USD continues to impact rural and urban purchasing power and livelihoods.

• Following the 2018/19 drought, crop production was well below average and the country is faced with a 2019/20 national cereal deficit estimated at over 800,000 MT. The 2019/20 rainfall season is forecast to be below average characterized by a late start and erratic rainfall. This combined with the anticipated widespread poor access to agricultural inputs, will likely lead to below average cropped area. A second consecutive below-average season is expected to result in lower than normal livelihood opportunities, household incomes, and 2020 harvest, driving atypically high assistance needs.

Current Situation

Due to very poor macroeconomic conditions and 2018/19 poor harvests, atypically high humanitarian assistance needs exist in Zimbabwe. The Government of Zimbabwe (GoZ) has implemented several measures to address the ongoing macroeconomic challenges facing the country (Annex 1). Despite efforts, the situation continues to deteriorate and remains highly volatile. According to independent sources, including the International Monetary Fund (IMF), the annual inflation rate in Zimbabwe was among the highest in the world in September, at around 300 percent. Other sources indicate the rate of annual inflation could be as high as 500 to 600 percent. The official annual inflation rates published in Zimbabwe were discontinued in June.

As of late October, the value of local currency – the Zimbabwe Dollar (RTGS/ZWL) – has depreciated by over 520 percent since February 2019, when the interbank market was introduced (Figure 1). The ZWL also depreciated by over 40 percent and 70 percent on the interbank market and parallel market, respectively, since mid-June when the ZWL was declared the sole legal currency. This is mostly due to the continued critical foreign currency shortages, mainly of the United States Dollar (USD) in formal markets.  The USD traded around 15.6 ZWL per USD on the interbank market and 21 ZWL per USD against electronic and mobile transfers on the parallel market as the end of October. Shortages of the local currency (bond notes and coins) have resulted in the notes and coins being sold at premium rates as high as 40 to 60 percent against mobile and electronic money transfers on the black market. Most goods and services on the markets have different prices depending on whether a buyer pays with cash (bond notes and coins), electronic and mobile money transfers, or US Dollars. This mainly affects poor households as most businesses and services insist on cash payments. In late-October, The GoZ announced the imminent intent to introduce a new currency in November. The currency will be in $2 coins and $5 notes, operating alongside the current bond notes and coins at a 1:1 ratio. This policy is aimed at improving availability of cash to the public as well as curbing the parallel market sale of local cash. Potential market impacts are currently not well understood as the market will need time to adjust.

Additionally, weekly fuel price increases have resulted in petrol and diesel prices escalating about 175 percent and 200 percent, respectively between mid-July and late-October. This has contributed significantly to transport, commodity and other service price increases on the markets (Figure 2). In October electricity tariffs increased by 320 percent, worsening the situation which has been characterized by power cuts lasting long hours daily. This has affected mainly poor households, especially in urban areas through reduced production and incomes, increased prices and household expenditure on alternative energy sources such as firewood, charcoal, and gas.   

In addition to the very poor macroeconomic conditions, poor 2018-19 harvests are also driving lower than normal household food access. Zimbabwe’s 2018/19 national maize production (officially estimated at 777,000 MT) was 54 percent below last year and 41 percent below the five-year average. Due to the foreign currency shortages and to facilitate grain imports, the government lifted the three-year maize import ban in early October to allow individuals and the private sector to import grain.

Market demand for maize grain is significantly above average across the country due to below average 2019 production. However, most markets are undersupplied with grain and many households are resorting to maize meal purchases, especially in typical deficit areas in the south, west, and extreme north. In response to the rapid devaluation of the local currency the Grain Marketing Board (GMB) increased cereal (maize and small grain) producer prices to ZWL $4,000 /MT in mid-October from the last price set in August at ZWL $2,100 /MT. This is a 925 percent increase from the ZWL $390/MT price in February (Figure 3). The GMB announced that it will back pay all farmers who had sold maize or small grains to the government this season. Grain deliveries to the GMB continue to be atypically low. Many buyers including commercial private millers and stock feed manufacturers have been facing challenges accessing grain from the GMB due to short supplies.

Both maize grain and maize meal prices are continuing to rapidly increase and remain well above average (Figure 4 and 5). In October, FEWS NET sentinel markets recorded an average maize grain price of ZWL $2.53 /kg, about 30 percent above the previous month. October maize meal prices increased by about 20 percent from the previous month to an average of ZWL $4.72 /kg. Though the demand for maize meal is atypically high for this time of year, effective demand is being constrained by poor household incomes and high and rising prices. Some traders are increasingly demanding only cash for grain as opposed to electronic transfers, which most households do not have. Bread was scarcely available in early October though supplies improved towards the end of the month; however, prices have increased significantly beyond what poor households can afford. Other food substitutes, such as rice and sweet potatoes are similarly unaffordable by most poor households.

As of the end of September, tobacco farmer registrations for the 2019/20 season were 20 percent lower than last year due to an increasingly challenging economic environment and low 2019 prices. Tobacco seed sales were about 20 percent below last year and at their lowest since 2015. National seed cotton sales were reportedly about 50 percent below the same time last year.  

By the end of October, most parts of the country have yet to receive any rains and the 2019/20 cropping has not yet begun. Furthermore, market access to agricultural inputs is very low as many poor households have low incomes and are facing high and persistently increasing input prices. Crop input assistance activities are yet to begin across most parts of the country.

Water availability and access across most parts of the country is very low and affecting poor households’ livelihoods and incomes, including livestock (mostly cattle) productivity and sales. In some areas, typical livestock movements to usual dry season grazing areas are not happening due to overgrazing and below average pasture availability. Most poor farmers cannot afford livestock supplementary stock feeds. Livestock feed is also not readily available on most markets. The high and increasing costs of livestock veterinary drugs is also affecting animal conditions in most parts of the country. Poor cattle conditions coupled with above average disease prevalence are leading to an increased number of livestock sales and deaths, mainly in typical arid parts of the country. 

Typical livelihood activities across all livelihood zones are constrained by the poor macroeconomic conditions, impacting many household incomes and access to food, especially for poor households. Typical livelihood activities and sources of income such as casual labor, self-employment, remittances, and livestock sales are below normal. Seasonal activities such as vegetable production and sales and brick molding are also below normal due to water shortages. Petty trading has increased as a livelihood and coping activity; unfortunately, the activity is mainly being affected by lack of capital, high and increasing cost of goods, and low demand for products due to low household incomes. The sale of wild products (fruits, thatching grass, firewood) is also limited. Gold panning activities are reported across most parts of the country, but only benefit small numbers in the population. As a result, poor household incomes are below average.  

Food consumption patterns in most parts of the country remain poor and continue to worsen. Due to the below average harvest, most poor households across the country have already depleted their own-produced foods and face high and increasing food prices to access market food. As a result, these households are employing consumption coping strategies including reducing the number of meals consumed and decreasing portion sizes, and preferential feeding of children ahead of adults, among others. Currently, a poor household’s typical meal consists of cereal (sadza) and vegetables (if available). Some members of households are supplementing with less preferred foods and wild foods, though the availability of these foods is below normal given last season’s poor rainfall.  

WFP and partners distributed humanitarian food assistance in October, prioritizing some of the worst drought-affected districts. Humanitarian food assistance is preventing more severe outcomes, where now Stressed! (IPC Phase 2!) outcomes are expected. Although, assistance is reaching far fewer people than the expected national need, and many areas of the country remain in Crisis (IPC Phase 3). These outcomes continue to be present as poor households have limited to no food stocks and constrained livelihoods due to the challenging macroeconomic environment.

Assumptions

The October 2019 to May 2020 most likely scenario is based on the following national-level assumptions:

• The macroeconomic conditions are expected to remain volatile and further deteriorate throughout the outlook period as critical foreign currency shortages in the formal markets persist. As a result, parallel market exchange rates are anticipated to remain above the official interbank market rates and drive further price increases and multiple pricing on the markets. Power shortages and increasing fuel and transport costs are also likely to persist.
• Following the lifting of the three-year maize import ban in early October this year, it is expected that the government and private sector will import maize from mainly international sources as typical regional sources are also experiencing deficits; however, critical foreign currency shortages are likely to limit imports. Consequently, the annual national cereal gap (estimated at over 800,000 MT) is not expected to be fulfilled.
• Markets across the country are expected to be undersupplied with grain through the end of the marketing year. The GMB is expected to serve as a main source of grain especially in deficit areas; however, stock shortages are expected to continue. In the absence of maize grain, an increasing proportion of households are expected to purchase maize meal and other alternative and less preferred foods.
• Maize grain prices are expected to remain above average due to very low supply, high demand, and likely continued depreciation of the ZWL (Figure 6). Maize meal prices and other staples are expected to be above average as commercial millers import their own maize supplies and power shortages and increasing fuel and transport costs are also likely to exert upward pressure on staple food prices.
• Anticipated above average and increasing prices of basic commodities and services are expected to continue to impact livelihoods for all wealth groups, and most severely for very poor and poor households.
• Current international forecasts indicate the start of the 2019/20 rainfall season will most likely be delayed and erratic with below average cumulative rainfall for the season. As a result, pasture and water availability for livestock are likely to remain lower than normal throughout the projection period. Furthermore, due to below average access to agriculture inputs and poor start to the 2019/20 season, area planted for crops is expected to be below average. Fall Armyworm (FAW), among other pests and diseases, is likely to negatively impact crop production. As a result, the 2020 green and main harvests anticipated to start in April, are most likely to be below average.
• Water availability and access challenges for human consumption and livelihood uses are likely to continue throughout the projection period, though some improvements are likely during the 2019/2020 rainfall season.
• Cattle conditions through December are expected to be poor to very poor in arid areas; although livestock conditions will also be poor in typical high rainfall areas, this is expected to a lesser extent due to some pasture availability in these areas. Availability and access to supplementary stock feeds and veterinary livestock drugs are expected to remain lower than normal. Cattle deaths are expected to by atypically high, until pasture lands regenerate in typical semi-arid parts of the country due to the lack of adequate water and pastures as well as high disease prevalence. Small livestock are expected to be generally in good to fair condition, though conditions in the most critical semi-arid districts may be poor. Livestock conditions are expected to marginally improve with the start of the rainfall season in November/December.
• Livestock prices between October and December are likely to remain below normal due to poor body conditions, especially for cattle, and below-average demand. In January livestock prices are expected to increase as body conditions start improving although prices will likely remain below normal. Livestock-to-grain terms of trade will be highly unfavorable to farmers selling their livestock. This is due to below average livestock prices against significantly above average cereal prices. Bartering of livestock for grain or basic commodities is anticipated at below normal levels due to poor grain availability and high prices and shortages of basic commodities.
• In-country remittances will remain low and below normal; those from outside the country, specifically South Africa, are likely to be below average due to below average labor opportunities and recent xenophobic attacks in that country.
• Incomes from both agricultural and non-agricultural labor are expected to remain below average throughout the projection period. This is based on anticipated limited opportunities for in-kind and cash payments, and the expectation for another below-average rainfall season.
• Cash crop production mainly tobacco and cotton are also expected at below average levels due to anticipated reduction in cropped areas, prospects of a poor rainfall season, and the challenging economic environment. 
• The 2019/20 WFP Lean Season Programme plans to reach at least 2.7 million people at the peak of the lean season, January through March in prioritized districts. However, since detailed plans were not available at the time of FEWS NET’s analysis, FEWS NET assumes humanitarian food assistance will continue at similar levels to October 2019. Plans for assistance from government were not available. 

Most Likely Food Security Outcomes

Acute food insecurity outcomes are likely to remain somewhat stable in semi-arid areas likely to receive humanitarian food assistance. However, Crisis (IPC Phase 3) outcomes are expected to persist across much of the country as the situation continues to deteriorate from October through the peak of the lean season in March/April. Throughout the projection period, areas of greatest concern include Kariba, Binga, Gokwe North, Mbire, Mudzi, and Chipinge where there would likely be some households in Emergency (IPC Phase 4) during the peak of the lean season. However, given plans for humanitarian food assistance in these areas, among other drought affected areas, Stressed! (IPC Phase 2!) outcomes are likely through March.

In areas where Crisis (IPC Phase 3) outcomes are expected to persist, poor households have already been relying on earlier than normal purchases, though they will face high food prices restricting their ability to purchase sufficient food to meet their basic food needs. These households are expected to engage in a variety of coping strategies till the harvest, likely in April. These strategies include; limiting meal frequency and quantity, increased consumption of wild foods, extended sale of livestock, labor migration, and decreasing expenses on healthcare, veterinary care, and agriculture inputs.

Based on historical data, the national median prevalence of acute malnutrition is 3.3 percent, which is “Acceptable” (GAM by WHZ <5%) according to the WHO Classification. In 2016 when the nation experienced similar El Nino conditions and almost similar production, the GAM prevalence was 4.4 percent. The national prevalence of acute malnutrition is expected to increase beyond both the average and current 3.6 percent, especially between February and March. Some localized areas will likely reach the Alert level (GAM 5-9.9%); however, the national prevalence will likely remain less than 5 percent.

The green harvest in March/April (green mealies, pumpkins, fresh groundnuts etc.) is likely to be below average especially in typical marginal production areas. The main harvest, anticipated to start in April, will also likely be below average. However, it will help improve outcomes to Stressed (IPC Phase 2), mainly in high production areas. However, in some deficit producing areas, Crisis (IPC Phase 3) outcomes are expected to continue.

Events that Might Change the Outlook

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

For more information on the outlook for specific areas of concern, please click the download button at the top of the page for the full report.