Government guarantees grain availability
Brian Rungano Temba
The Minister of Finance and Economic Development Professor Mthuli Ncube and his Permanent Secretary Mr George Guvamatanga addressed the country with Government`s measures to address inflation and the moving exchange rate.
Addressing a highly subscribed Press Briefing, which attracted even non-journalists Professor Ncube said the plans to ensure guaranteed grain (wheat and maize) availability through the Grain Marketing Board.
“Government has noted that there is a looming shortage of maize meal and flour in the market which has resulted in the sharp increase of the price of bread and mealie meal to levels which the ordinary citizens cannot afford.
Whilst the levels of our Strategic Grain Reserve are relatively below ideal levels, there is, nevertheless, urgent need for Government to intervene to bring stability in the price and supply of maize meal and bread flour in the economy,” Professor Ncube.
According to the statement presented by The Minister, Zimbabwe Treasury has organized that Government should release 20 000MT per month to millers for the next three months beginning in July 2022 at the import parity price calculated at the prevailing interbank rate.
Millers have indicated that they will in turn import 70 000MT of wheat over the same period.
The wheat will be sold at an import parity price of USD680 converted into local currency equivalent at the ruling exchange rate.
Therefore, the price of wheat to millers will be ZWL$ 239 360.
For maize, an immediate release of the 7 000MT outstanding maize allocations to millers which had already been paid for but could not be allocated due to technical issues.
Over and above this, millers have indicated that they have 25 000MT of maize which has already been paid for and are ready to make a swap arrangement with Government, in this regard, Government will release the equivalent quantity of maize from the Strategic Reserve in July 2022 against the impending delivery of the purchased maize.
Thereafter, a further release of 27 000MT of maize from the Strategic Grain Reserve to millers at a price of ZWL $75 000 plus the US$90 at the prevailing interbank rate.
The selling price of maize to millers will, therefore, be at ZWL$106 680.
In his recommendations, Professor Ncube said;
“It has been noted with concern that millers have always put the burden on Government to replenish their grain stocks. Whilst we appreciate the importance of ensuring food security to the nation, millers should be encouraged to source their own grain stocks whenever possible.
Given the envisaged shortfall of both maize and wheat during the current season, the Government will expedite the importation of maize available in Malawi and Zambia, while wheat will be sourced from cheaper source markets.
The Government of Zimbabwe remains committed to maintaining macro-economic stability and the elimination of harmful and destabilising arbitrage conditions that have pervaded the economy at the expense of the generality of citizens,” said Professor Ncube.
Besides food, there is fuel whose rising prices have been a concern to the economy as it is a cost driver.
Globally, fuel prices have risen due to one of the OPAC giants Russia currently being engaged in war with Ukraine.
Over the past few months following significant pressure on global fuel prices due to the tensions in Eastern Europe Government has been intervening in the fuel sector to stabilise prices.
The remedies have included, the downward review of Government Fuel Levies and release of Fuel from the Strategic Fuel Reserve.
This week, Government completely removed the Levy on Diesel, thereby bringing it to Zero Cents, and significantly dropped the levy on Petrol.
“This prevented the price of fuel from breaching the USD2.00 per litre mark,” Professor Ncube said, with his Permanent Secretary besides him.
Permanent Secretary in the Ministry of Finance Mr Guvamatanga told the press that the three are staple basic goods that have been subject to Government measures to stabilize the economy due to there being no alternative to them.
“There are 14 basic goods in Zimbabwe but our measures today will facilitate the availability to millers the grains, wheat and maize, because these are staple goods.
To topple monopoly by the retail we have relaxed import duties for the other basic goods,” added Mr Guvamatanga.
He went on to explain that Government used to have many alternative sources of basic products like cooking o which would be expressed from cotton seed, sunflower and groundnuts, however the nation is now subjected to exclusive importation of soya bean crude oil.
“Oil expressers have to explain why in the past we had cooking oil from Sunflower, ground nuts and cotton seed but they are insisting on refining imported soya beans crude oil only,” said Mr Guvamatanga.
Apart from the availing of staple basic goods for the public consumption, Government also entrenched in law, the use of a Mutli-Currency economy for the five-year duration of the National Development Strategy Policy Phase 1 (NDS1) and the Inter-Bank Market rate.
The move was owed to the need to tackle the rise in lack of confidence in the consistency of the multi-currency economy and to end the speculative rates.
“To eliminate speculation and arbitrage based on this issue, the Government has decided to embed the multi-currency system and the continued use of the US dollar into law for a period of 5 years.
The interbank market exchange rate is now being determined by banks on a willing buyer-willing seller.
While economic agents are free to price their goods in US dollars or Zimbabwe dollars, and there are no price controls, the equivalence of US dollar prices and Zimbabwe dollar prices for a commodity should be strictly based on the current interbank exchange rate as determined by the Willing Buyer Willing Seller rate.
No discounting of prices for payments made in US dollars shall be allowed and the law provides for strict criminal and civil penalties including US dollar-based fines, suspension or cancellation of business or trading licenses for offenders,” the statement further stated.
Recent Comments