LIVINGSTONE MARUFU
THE Reserve Bank of Zimbabwe (RBZ) is issuing new letters of credit (LCs) to import grain from various African countries as government moves to avert grain shortages.
The development comes after the country has been hit by El Nino induced drought last year, leaving over 8m people in need of food aid.
This has seen government importing an average of 120 tonnes of maize from South Africa through Beitbridge Border Post daily to ensure no one starves.
RBZ governor John Mangudya (pictured) told Business Times: “The Reserve Bank of Zimbabwe is issuing letters of credit, processed through local banks and guaranteed by the Afreximbank, to ensure imports of the grain so that the population has enough food.”
He said RBZ has been issuing LCs for the grain imports since last August and more will be issued to ensure the availability of grain, Zimbabwe’s staple food. LCs worth US$10m are expected to be issued.
The imports are a result of the effects of last year’s drought that saw Zimbabwe harvesting around 700 000 tonnes of maize, against an annual demand of two million tonnes for both human and livestock consumption.
Despite reaching that number, farmers managed to import less than 500,000 tonnes of maize to the Grain Marketing Board (GMB).
Recently, GMB executives were in the eye of the storm for exporting subsidised maize to the Democratic Republic of Congo at a time when 75% of the population is facing starvation.
Last week, Zimbabwe took delivery of 42,000 tonnes of maize imported from Tanzania and is being transported via Mozambique.
Cumulatively, the government purchased 100,000 tonnes of cereal from Tanzania as part of an extensive importation strategy since mid-last year.
Zimbabwe is also looking into Uganda for more maize but the maize was widely condemned for poor quality in various quarters.
Millers need about 218 tonnes of maize daily for the production of mealie-meal but the figure is not achieved due to corruption and inhouse fighting that has dogged the milling industry.
Government extended its subsidies to millers to produce roller meal, which is being sold for ZWL$70 for 10 kg pack, compared to unsubsidised brands which cost double the amount.
But millers who were tasked to supply the population with mealie meal are diverting the product into the black market and selling it for ZWL$160 or US$5, making it difficult for ordinary citizens to get it.
In 2019, Zimbabwe lifted a ban on private grain sales and granted those with free funds permission to import maize quantities of their choice to complement monetary authorities’ efforts to improve national grain reserves.
Last year, GMB reviewed maize prices thrice to lure farmers to deliver maize to the marketing board but the deliveries remained low.
With looming drought in 2019/2020 summer cropping season the country is expected to fork out over US$300m to import maize.
Zimbabwe hoped for a better agricultural season in 2019/2020 summer cropping season but with a month-long dry spell the country’s prospects of good harvests are likely to be down the drain.
The development will further burden the already struggling treasury and will cause more problems for the bedridden economy as more foreign currency is needed to import the cereal.
The government is moving to ensure that people have adequate food to contain the restive population.
Government is distributing grain in many urban centres including Harare to cushion the poor from hunger.
The 2019/20 ZimVAC Rural Livelihoods Assessment projected that approximately 28% (2.4m) of the rural population will be food insecure during the peak hunger period (January to March 2020).
This means food insecurity prevalence is 51%, for the rural households, an increase from 28% projected in 2019.
Matabeleland North (58%) has the highest proportion of food-insecure households while Mashonaland Central and Midlands (47%) have the lowest. Government believes that the food insecure rural households require a total of 720,707 tonnes of cereal to meet their needs over 13 months and the food insecure households require 500,320 tonnes of maize during the same period.
