During his 2020 budget presentation, Finance Minister Mthuli Ncube made a very serious mistake. He toyed with removing maize subsidies as he claimed they were costly to the fiscus. Just like that in a week, the price of maize-meal doubled to more than $100 ZWL/10kg bag.
That send the government in panic mode as maize-meal is the country’s staple and a lot of people were now unable to afford sadza. President Mnangagwa was not amused and in a rare public rebuke against his Finance Minister, he said he had not been consulted and reinstated the subsidy.
However, it might well be that behind the scenes nothing had yet been done to tame the price of roller meal. Yesterday the government reached an agreement with millers that will see maize-meal sell for around $50 ZWL/10kg.
Press release on the agreement
PRESS STATEMENT ON TARGETED SUBSIDIES ON ROLLER MEAL
As you may be aware, His Excellency the President, Cde E.D Mnangagwa announced
that subsidies on maize be restored in order to cushion the vulnerable groups of our society from the negative impact of increases in basic food prices.
Under this new subsidy model, the Government will fund the procurement of grain at
market prices and selling 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.
The government will ensure that the requisite monthly tonnage of 40 000MT required for
producing 32 000MT of roller meal will be timely availed by GMB to members of the Grain Millers Association of Zimbabwe (GMAZ).
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 10 kg bag.
The payment modalities for the new targeted subsidy for roller has been discussed
and agreed with GMAZ, whose members have a 95% share of the roller meal market.
The implementation of this new subsidy policy is with immediate effect.
Hon. Prof. M. Ncube
Minister of Finance and Economic Development
05 December 2019
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