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Zimbabwe’s food import bill has expanded exponentially in the first nine months of 2020, reflecting the biting effect of drought experienced over the last two years, the Minister of Finance and Economic Development Professor Mthuli Ncube disclosed in the 2021 Budget Statement presentation on Thursday.
Food imports increased from US$140.5 million in the first nine months of 2019 to US$458.0 million for the comparable period in 2020, representing an increase of 226%. Minister Ncube said this was on account of high grain imports the country had to procure following two consecutive drought years.
Despite the impact of drought, Zimbabwe’s food imports tended to increase substantially through 2000 – 2019 period ending at 8.1 % in 2019. Local productivity has taken a heavy hit following the contentious land reform in the late 90s, with the country now spending a larger bill to import its staple maize grain.
According to the Reserve Bank of Zimbabwe’s (RBZ) monthly report, Treasury spent US$1.5 million on maize imports in August, and the figure shot up to US$4 million in September. This is happening at a time where government is providing food handouts and subsidised roller meal, which are part of measures to fight the existing threat of food insecurity among vulnerable social groups.
Internet tabloid, Femine Early Warnings Systems Network (FEWS NET), indicated that the severity of food emergencies are expected to persist across most typical deficit producing areas in the south, west, and extreme north through at least March 2021.
“This is the result of ongoing poor macroeconomic conditions, consecutive droughts, and continued COVID-19 impacts,” said FEWS NET.
The food import bill is likely to close the year even higher amid continued price increases on wheat and maize owing to depleted global yields which have seen the cost of importing grain surge.
The Grain Millers Association of Zimbabwe (GMAZ) earlier this month indicated that it is now working with the central bank to mitigate these increases and consumer spend ahead of the festive season.
Meanwhile, merchandise imports are estimated to have contracted by 4.3% to US$3.2 billion during the period under review from US$3.3 billion for the same period in 2019.
“The declines were mainly witnessed in imports of fuel, raw materials, machinery, manufactured goods and vehicles, on account of the impact of COVID-19 restrictions,” said Minister Ncube while indicating that the COVID-19 pandemic was mainly felt in trade in services with both exports and imports registering sharp declines.
He said, “Services exports sharply contracted to US$245.2 million for the period January to September 2020 from US$422.3 million for the comparable period in 2019, owing to weak travel and tourism, transport and other business services exports. Services imports similarly declined from US$679.9 million in 2019 to US$250.5 million in 2020 for the same period.”