Zimbabwe has lifted import controls on grain as it attempts to soften the impact of the worst drought to hit the region in almost four decades.
UN estimates are that at least 5.7 million Zimbabweans will need food aid this year. Zimbabwe needs to import 800,000 tonnes of maize this year.
In a statement on Friday, government said it had dropped the need for import permits for maize, maize meal and wheat flour. All import duties on flour, maize and maize meal have also been suspended.
In his 2020 budget statement, Finance Minister Mthuli Ncube announced that government was ending subsidies paid for wheat and maize, saying they were a burden on the country’s finances.
“All users of grain, including millers, will now buy grains at cost price, which currently stands at ZWL$4 000 for maize and small grains, and ZWL$8 612.08 for wheat, per metric tonne,” government said.
Subsidies, under which millers bought discounted grain from the Grain Marketing Board, have for years kept prices low. Their removal, starting from January, likely see the prices of the staple maize and bread go up, adding more pressure on rising inflation and further eroding incomes.
However, government says it is replacing the old subsidy with a new “targeted” system, although Treasury has as yet failed to spell out how this would work.
“Government will also be unveiling a mechanism for targeted subsidies for basic foodstuffs, particularly roller maize meal and bread flour as outlined in the 2020 Budget Statement, once the finer details of the mechanism are worked out. This is intended as an additional cushion for vulnerable households and the generality of Zimbabweans,” Cabinet said in a statement Thursday.