Causes Of Inflation In Zimbabwe

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Problem and solution in Zimbabwe
Inflation refers to rise or increase in prices and fall in the purchasing of the value of money. A problem tends to affect many countries worldwide. Among the countries that have been affected by this crisis, Zimbabwe is one of them. The problem always plunges many countries into long seasons of instability. It is one of the countries facing the problem of inflation for a longer period. The problem of inflation in Zimbabwe came because of bad government decisions on financial matters. This led to the rise of hyperinflation that always comes as result of inflation being extremely high and increasing at a rapid pace.

The hyperinflation led to speculation of money and basics such as food. By 2008,
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The borrowed money was to pay for all of the expenses and funding the quasi-fiscal activities (Muponda, 2009, p. 1). The problem led to many things becoming luxurious for the residents to purchase. Examples are things like meat, margarine, bread and cup of tea in the morning. Apart from making some things luxuries, the residents were tormented (Wines, 2006, p. 1). The budget laid ahead was spent, and the government services began to crumble. However, the Harare water meant for drinking that siphoned from the lake became unreliable (Wines, 2006, p. 1). Diseases like cholera and dysentery swept the entire city. Apart from that, Zimbabwe residents encountered electrical blackouts and jobless. The demand of money increased continuously and in 2007, Zimbabwe was forced to cut off some zeros on their …show more content…
166), Zimbabwe need to reform some of the things: in order to avoid hyperinflation. They need to conduct a public expenditure reform by reducing the public sector wage bill, eliminating subsidies and reduce transfers. They need to do it by protecting the share of public investment. However, they also need to conduct tax reform. Zimbabwe needs to reduce or simplify its tax administration system. Lastly, they require creating an enabling business environment since their business regulations are confusing and costly. According to Masungure and Shumba (2012, p. 169), the government of Zimbabwe need to open up the economy and create a more conducive environment for domestic and foreign

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