The government has decided to allow only the Grain Marketing Board (GMB) to import grains and has stopped issuing import permits to independent millers and traders, at a time when an estimated 2.2 million Zimbabweans are food insecure. Media reports indicate that a deal between the state and a South African grain trader, for the supply of some 100,000 tonnes of non-genetically modified white maize, resulted in the Ministry of Agriculture, Mechanisation and Irrigation Development ending permit issuance to other parties from last week.
There are multiple concerns with this development: 1) the GMB is strapped for cash and is unable to even pay local farmers for the maize they produce; 2) experts believe that South Africa does not have 100,000 tonnes of non-genetically modified maize to sell to Zimbabwe; and 3) aid agencies that could help temper a shortfall in maize imports are reporting significant underfunding for their activities in Zimbabwe. The country is currently in its lean season and the next maize harvest will only arrive from April 2014.
According to the Famine Early Warning Systems Network (FEWS NET), maize grain and meal prices are approximately 25% y-o-y higher at present and that only one million Zimbabweans are currently receiving food aid. Some rural areas have witnessed a doubling in food prices over the past year, according to the World Food Programme (WFP). The 2014 fiscal budget did not provide any funds towards subsidising imports and the state is adamant that the cost of imported grains will be passed on to the consumer.
WHY DO WE CARE? The state is giving a cold shoulder to hungry Zimbabweans. On top of the GMB’s established woes, a preference amongst smallholder farmers to grow tobacco, and a lack of financial support from the government to bring down the prices of staple food, a halt to import permit issuance will certainly further depress the general wellbeing of Zimbabweans. This is another blow to the country’s economic prospects during 2014 after last year ended on a depressing note. It appears that the lack of faith displayed in the ruling party after their victory in the July 2013 elections was definitely not misplaced.
Analyst: Christie Viljoen