THE Zimbabwe Coalition on Debt and Development (Zimcodd) has challenged the government’s claims of economic stability, arguing that macroeconomic gains on paper mask the rising daily costs and taxes faced by ordinary Zimbabweans.
Zimbabwe National Statistics Agency (ZimStat) reported a ZiG annual inflation rate of 4,1% in January, down 10,9 percentage points from December 2025.
Following the report, the Reserve Bank and Treasury celebrated the decline as proof that hawkish policies were stabilising the economy.
Last week, the Confederation of Zimbabwe Industries cautioned against celebrating early, noting that the return to single-digit inflation remains fragile without continued fiscal and monetary discipline.
“For many ordinary people in Zimbabwe, the economy is not experienced through inflation graphs or exchange-rate tables, but through the daily struggle to stretch shrinking incomes across food, transport, school fees and rent,” Zimcodd said in its Weekender Review.
The coalition highlighted that higher indirect taxes often matter more than headline inflation. In January 2026, the government increased the standard Value Added Tax rate, raising prices on goods and services. Charges on electronic transfers, card payments and cash withdrawals add hidden costs that hit low-income households hardest.
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Zimcodd said in the lived economy, headline inflation numbers were not translating to livelihood improvements.
“In the lived economy, however, higher indirect taxes matter more than headline inflation numbers. In January 2026, the government increased the standard rate of Value Added Tax, raising the price of many everyday goods and services at once,” Zimcodd said.
“At the same time, charges on electronic transfers, card payments and cash withdrawals continue to add hidden layers of cost to ordinary transactions. For low-income families who spend most of their income on necessities, these taxes are not abstract fiscal tools, but they are daily penalties on survival.”
The 2025 Zimbabwe Tax Perception Survey found that nearly nine out of 10 citizens feel the tax burden no longer matches their ability to pay. “Zimbabwe’s economy remains highly informal and international evidence consistently shows that consumption-based taxes are regressive, meaning poorer households spend a larger share of their income on taxed goods and services,” Zimcodd said.
For female informal traders, Zimcodd found that rising transaction costs and weak demand are translating into longer working hours, shrinking profit margins and increased reliance on short-term debt to keep businesses alive.
“From a civil society perspective, the central concern is not only how much revenue the State raises, but who carries the burden. Zimbabwe continues to face high poverty levels, with national statistics showing that more than half of the population lives below the poverty line,” it said.
“At the same time, development partners such as the World Bank and the International Monetary Fund emphasise the importance of macroeconomic stability and fiscal discipline, often as a foundation for recovery.”
Zimcodd said the lived economy revealed that stability achieved through heavy reliance on consumption and transaction taxes deepens inequality and social strain.
“Currency calm and lower headline inflation may reassure markets, but for households facing rising everyday costs and insecure incomes, progress must be measured differently, by whether people can afford food, transport, healthcare and dignity,” it said.
“Until fiscal reforms actively protect low-income and informal workers, especially women, economic ‘stability’ will remain a statistic rather than a shared reality.”