Zim secures $200m for maize

HARARE - Zimbabwe has secured a $200 million loan facility from the Afreximbank for maize imports to avert hunger, central bank governor has said.

Reserve Bank of Zimbabwe (RBZ) governor John Mangudya yesterday told journalists in the capital that the loan would see the country starting imports “immediately”.

“With a consumption of around 1,5 million tonnes and 300 000 tonnes of that going into stock feeds, we will have to start importing immediately,” he said on the side-lines of a Confederation of Zimbabwe Industries 2016 outlook symposium in the capital.

Mangudya also said the Grain Marketing Board had gone to tender to secure a source for the imports.

“We will only decide after the tender. I cannot disclose at this moment the main source because the matter has gone to tender,” he said, in the wake of Zimbabwe’s main maize source, Zambia, is  also expected to outsource from South America in the wake of a regional drought.

The central banker also said the country’s stocks were still good for the next eight months. Mangudya, however, quickly added to avoid high prices in the coming few months, the imports would have to begin immediately.

“Right now our reserves taking into account imports from last year can stretch to September, but we want to start stocking our reserves so that we avoid last minute desperate transaction and taking into account the regional deficit, prices will have gone up when our time of need comes,” he said.

Bankers Association of Zimbabwe president Sam Malaba also told delegates at the same event that South Africa was looking at importing around five million tonnes of maize, thus crowding regional demand.

“Practically, we may need to import at least one million tonnes of maize this year, with South Africa set to import five million tonnes; government needs to prioritise the financing of the process,” said Malaba, who is also chief executive of Agribank.

This comes as Zimbabwe — once known as the breadbasket of southern Africa — has been importing maize since the early 2000s when the country forced off the land 4 000 commercial white farmers to pave way for over 400 000 landless black farmers.

The country is currently importing up to 700 000 tonnes of the staple maize to avert a crippling hunger-crisis caused by harsh weather conditions.

Generating 30 percent of export earnings and contributing 19 percent to gross domestic product, economic experts say agriculture, which is vital to the country’s economy as close to 70 percent of the population survives on subsistence farming, was devastated by the government’s controversial policy.

Comments (2)

Our priorities are upside down. The starting point should be to re-arrange our budget allocations for 2016 b4 we look at the borrowing option. Govt should reduce its budget allocations for foreign travel,luxury vehicles etc and re-allocate the saving to the importation of maize. The second thing to do is to appeal for food aid to the international community. External borrowing should be resorted to as a last option. Borrowing for consumption purposes is not advisable becoz such loans are repaid to the lenders from Zimbabwe's export proceeds. For this reason it is better to borrow for productive purposes and especially in the production of export goods.

Victor - 25 January 2016

Victor you are spot on. There is no need to borrow for such consumptive activity. The private sector has the capacity to import enough grains for the consumption. Those who cant afford to buy can always have donor come to their rescue or that's when government needs to step in but certainly not with 200 million worth of grains. Such an amount could be used to establish irrigation systems which could guarantee future production in the face of draughts.

chiko - 25 January 2016

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