Zim scraps import permits for staple foods as hunger levels reach new record | Fin24
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Zim scraps import permits for staple foods as hunger levels reach new record

Nov 24 2019 10:53
Crecey Kuyedzwa

Drought-stricken Zimbabwe has relaxed conditions of importation of grain in a bid to ensure essential foodstuffs remain available, after a being hit by a devastating El Nino-driven drought and cyclone Idai in the past agricultural season.

According to the Vulnerability Assessment Committee’s (VAC) evaluation report, which was released in October, some 4.7 million people in the southern African country will need food assistance between October and December this year.

This number is projected to rise to 5.5 million between January and March 2020, which would be the highest number on record.

The country's severe food insecurity is mainly driven by a steep reduction in the 2019 domestic cereal harvest, with Zimbabwe only having 780 000 tonnes of maize. The maize output is estimated to satisfy less than 50% of the national consumption requirement in the 2019/20 marketing year.

This has meant the country will have to import to meet the deficit prompting the cash strapped government to speed up the process and relax import terms.

Drastic measures

In a joint statement released on Friday by the ministries of Finance, Agriculture and Industry, the Zimbabwe government announced temporary measures "which will be implemented with immediate effect."

The measures include the "removal of control of goods import permits for maize grain, maize meal, and wheat flour".

The Ministry of Industry said it "will put wheat flour on the Open General Import License", a departure from the norm, where one needed a permit.

In addition, the Ministry of Finance will "suspend all import duties currently applicable," in an effort to make products affordable for importers and consumers.

Normally maize meal will attract an import duty of 25%, while wheat flour would attract an import duty of 20%. 

Zimbabwe also abolished subsidies on locally produced grain, with Finance Minister Mthuli Ncube saying "market distortions associated with subsidies present an additional risk to macroeconomic and fiscal stability."

He said Zimbabwe will apply a single exchange rate regime throughout all sectors of the economy to "avoid implicit subsidies arising from preferential allocation of foreign exchange at below-market exchange rates, as it was previously the case for fuel imports and other prioritised goods."

zimbabwe  |  food security  |  economy


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