Affordability and forex challenges weigh on 2019 food imports

  • Food exports declined by 33.6%
  • Decline attributed to affordability challenges
  • Maize imports increased by 86.2%

Harare- Food imports shrank by 33.6% to US$299.4 million in 2019 from US$451.2 million in 2018.

This was said in the February 2019 Monetary Policy Statement presented by the Governor of the Reserve Bank of Zimbabwe, Dr. John Mangudya.

The huge decline in food imports was largely due to foreign currency shortages, which saw the country importing US$6.6 million worth of maize grain in the first three quarters of 2019.

Maize imports are however, estimated to have increased by 86.2% from US$37.9 million in 2018 to about US$70.6 million in 2019.

The decline in imports should be commendable especially considering that the country recorded a trade surplus of US$311.2 million in 2019 however, this position was achieved at a time the country also recorded a decline in key exports such as gold and agriculture products. Production in 2019 was generally lower where drought and power shortages have taken its toll.

This has triggered food insecurity in the country and its privy to say that the country needs to export more to deal with this calamity.

According to the Monetary Policy, wheat imports in the period under review declined by 42.5%, from US$117.2 million in 2018 to about US$67.4 million in 2019.

Similarly, rice imports slumped by 52.5% from US$125.4 million in 2018 to US59.6 million in 2019

The macroeconomic environment in the country has been characterized by among other things, lack and high cost of accessing foreign currency which has affected not only the government but even private companies who source products and inputs across the borders of the country.

Reflective of the country’s foreign currency challenges, forex bank deposits constituted only 365 of the country’s total bank deposits while the other 64% was in local currency.

Total foreign currency received in the period from January to December 2019 amounted to US$6.88 billion, compared to US$7.21 billion received during the same period in 2018, representing a 4.4% decrease in foreign currency supply.

In order to curb the hunger that the nation faces, government has also been subsidizing grain with the revised subsidy currently at ZWL$70 from an earlier price of ZWL$50.

However, despite there being subsidized grain, the market is hampered with short supply evidenced with the emergence of long queues for roller meal while reports have emerged that some dealers are illegally exporting the subsidized grain in a bid to earn foreign currency.

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