When I think about what is happening right now I wonder - when will the
crunch come? This morning I was in one of the largest food companies in
Zimbabwe. Parked outside were long lines of 30 tonne trucks - all
drivers standing by waiting for food aid to arrive. The company staff
me that they had not had a delivery of maize for four weeks. Other
tell the same story. In town I passed a man with a small sedan vehicle
was selling 10 kg bags of maize meal at Z$350 000 per bag. He was
by a couple of hundred desperate customers.
Bulawayo has been without maize meal for the past fortnight - the
News headlined the shortage this last weekend.
The GMB has a national monopoly over the purchase, storage and sale of
maize in Zimbabwe. We consume about 1,2 million tonnes a year as maize
for human consumption - it is the national staple food. That is 110
kilograms of maize per capita.
The financial numbers of this exercise are huge. A tonne of maize from
Africa lands here in Bulawayo at about R1500 per tonne. At official
rates this is Z$24 million dollars per tonne. The GMB sells it at Z$600
a tonne - a direct subsidy of Z$23 400 000 per tonne - a 97.5 per cent
subsidy. Take into account the costs of the GMB - interest, transport,
staff, silo management costs, unloading and loading, sales costs and
probably looking at a direct subsidy per tonne of Z$28 million per
Z$33,6 trillion a year or nearly a third of total revenues from all
This is clearly not sustainable and how the Government will deal with
is anyone's guess but the profiteering going on in the trade is equally
stunning. That 10 kilogram bag of maize meal probably used 11 kilos of
at a cost to the miller of Z$6 600. His gross margin is Z$343 400 per
his costs probably about Z$70 000 leaving him a profit of Z$273 400 or
per cent of his selling price. Not bad.
If they were to charge an economic price for maize of Z$28 000 a kilo,
product would probably end up on the shelves at about Z$413 000 for a
kilo bag. So the bulk of the subsidy on maize is actually going to the
middlemen. I run a supermarket as one of my concerns, we cannot buy
meal from the GMB mills and have to buy from intermediaries who put a
substantial mark up on the product. This sort of thing is going on
So we are left to wonder - when will the crunch come - Maize imports at
US$250 a tonne will require us to find US$350 million this year for our
import needs. If the State cannot find this money - we will go hungry.
they do find it and continue to sell at present prices, then the
the GMB will, by itself, push the budget deficit over 20 per cent of
This is simply not sustainable.
By my own calculations inflation in January is well over 900 per cent
still rising. Inflation, a runaway budget deficit, the impossible
the patronage system in a shrinking economy, a hungry angry people. We
close to breaking point in every sense. Perhaps the crunch has come.
Bulawayo, 31st January 2006