Addressing youths at the 2019 National Youth Convention at Rimuka Stadium in Kadoma exactly 10 days ago, President Mnangagwa expressed unhappiness at the 100 percent increase in the mealie-meal price that had taken effect two days earlier.
A removal of a subsidy on maize procured from the Grain Marketing Board by commercial millers had resulted in the sharp increase in the price of the basic commodity. From around $50 per 10kg bag of mealie-meal, the price had increased to $100. A standard family of six which needs about 40kg of mealie-meal per month, was going to spend around $400 monthly on mealie-meal alone if the subsidy had not been restored. That is excluding relish, cooking oil, bread, sugar and other basics.
Amid the prevailing economic challenges, many of us were going to find it impossible to raise enough money to buy mealie-meal. In other words, the national staple food was not going to be a truly national staple. It was going to be worse since, we can assert, there is no viable alternative to isitshwala for millions of citizens as the few foods that can attempt to stand in its place are not only more expensive but are also too light in the tummy.
The Government, as any responsible government would have done, stepped in and did so in a smart way. We say smart because we have the experience of authorities, seeking to demonstrate a pro-poor disposition, simply ordering the market to reduce prices of basic commodities. Ultimately, this did not work as the basics immediately disappeared from supermarket shelves only to appear at extortionate prices on the black market which cannot be regulated.
As the Minister of Finance and Economic Development Professor Mthuli Ncube announced on Thursday, the Government has, after negotiations with the Grain Millers’ Association of Zimbabwe (GMAZ), come up with a subsidy specifically targeted at roller meal production. As a result of the subsidy, the price of roller meal will drop by 50 percent in the next few days.
“In this regard, the new subsidy model will therefore target the production of roller meal resulting in the retail price of ZWL$50 for a 10kg bag,” he said.
“The payment modalities for the new targeted subsidy for the roller meal has been discussed and agreed with GMAZ, whose members have 95 percent of the roller meal market. The implementation of the subsidy is with immediate effect. As you may be aware, His Excellency the President Cde ED Mnangagwa announced that subsidies on maize be restored in order to cushion the vulnerable groups of our society from the negative increases in basic food prices. Under this new subsidy model, Government will fund the procurement of grain at market prices and sell the same to registered maize millers to ensure availability and affordability of the commodity. This model will create fiscal space for Treasury to finance other social protection programmes. Government will ensure that the requisite monthly tonnage of 40 000 metric tonnes required for producing 32 000MT of roller meal will be timely availed by the Grain Marketing Board to members of the GMAZ.”
The Government’s decision could not have come at a better time for millions across the country. We are suffering the impact of a failed 2018/19 farming season. Since most people did not harvest much this year because of the drought, they and their families are buying mealie-meal. This would have been different if we had had a successful 2018/19 season. Instead of people simply getting maize from their granaries and shelling for milling, they, due to their failure to harvest much, have to buy mealie- meal. A large proportion of the population was, therefore, going to be adversely affected by the high mealie-meal price if the President had not intervened.
The GMAZ was consulted before the subsidy was announced which means that the intervention has the critical buy-in from a key stakeholder. The finance ministry and the Government at large deserve plaudits for taking everyone on-board before taking this important policy decision. Doing so engenders mutual understanding in the system and policies taken after broad consultations tend to succeed which is what Zimbabwe wants in relation to the mealie-meal subsidy.
Yet another good point about the subsidy is its being targeted at roller meal, the brand that is consumed by the majority of our people. It would have been unnecessarily expensive if the Government had effected a subsidy on all mealie meal. This would have meant it also covering super refined mealie meal, which is always more expensive than roller meal and traditionally favoured by the wealthy. The Government has no business subsidising elites and their expensive tastes. In any case super refined mealie-meal, as all refined foods, is bad healthwise.
It is hoped that the mealie-meal subsidy will work flawlessly and have a positive impact as the public transport subsidy has had. Our people deserve affordable food, transport services and other essential social services. Only their Government can provide them.