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Zimbabwe President Backtracks On Grain Subsidy

Carolyne

Nov. 30, 2019

Zimbabwe President Emmerson Mnangagwa’s government will scrap its plan to remove grain subsidies next year, a move it says will protect impoverished citizens from rising food prices, state media reported on Thursday.
The country is experiencing its worst economic crisis in a decade, marked by soaring inflation and shortages of food, fuel, medicines and electricity.
Half of Zimbabwe’s population needs food aid after a devastating drought across the southern Africa region, worsened by an economy expected to shrink by 6.5% this year and month-on-month inflation at a four-month high of 38.75%. [nJ8N27A00W]
Zimbabwe’s grain agency buys grain from farmers and releases it onto the market at subsidised prices, costing the treasury tens of millions of U.S. dollars. The government had planned to remove the subsidy in its 2020 budget.
Mnangagwa was quoted in the state-owned Herald newspaper as saying that would no longer happen.
“We cannot remove the subsidy,” he was quoted as saying. “So I am restoring it so that the price of mealie-meal is also reduced (next year).”
The removal of the government’s grain subsidy would have seen a 10 kg bag of maize meal, the country’s staple, costing 102 Zimbabwean dollars (about US$6.30), against 60 Zimbabwe dollars now, in a country with 90% unemployment.
Last week, the government removed import controls on maize and wheat flour to try to prevent food shortages.
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