Subsidies on basic foodstuffs to be lifted

Subsidies on basic foodstuffs are likely to be lifted in the coming year when the country comes under pressure to implement the Economic Structural Adjustment Programme which is now way behind schedule.

By the look of it, it won’t be too painful for consumers because other products that are not subsidised are going up by much larger proportions than the basic foodstuffs like bread and maize.

In the 12 months up to the end of August, for example, the average price index for the lower income group, which is most vulnerable , went up by 56.8 percent. Foodstuffs alone went up by 67.4 percent for the lower income group with transport going up by 56.4 percent.

The subsidy is now almost nil. A white loaf is supposed to cost $1.63, which very few shops charge, should retail for $2.04 without government subsidy. Brown bread should cost $1.87 instead of $1.50.

It is perhaps the price of maize that could be a cause of concern as it will almost double if the subsidy is lifted. According to government figures 50 kg should cost $84.02 instead of the current $54.47, a 20 kg packet should be $34.68 instead of $22.53 while 10 kg will go up to $17.51 from $11.40 and the price of a 5 kg packet will increase from $5.82 to $8.88.

Most people buy a 20 kg bag and the increase does not seem to be that steep so there is likely to be little resistance as this is exactly what happened to refined meal which had a similar increase this year.

While it will be painful for the consumers, the lifting for subsidies will leave the government without any excuses for excessive spending. At present government ministers claim that the government is spending millions on food subsidies as well as feeding the rural folk.

Simon Moyo, Deputy Minister of Industry and Commerce, for example, claims that 73 percent of the rural poor are receiving food handouts from the government. The other 27 percent that does not qualify for handouts, he claims, is buying, maize at a special price of $99.97 for a 90 kg bag and $56.10 for a 50 kg bag. He does not give the actual price that the people should pay but insists that the government is meeting all the transport costs involved.

In reality, however, while millions of people may be on the government food list, less than half are getting the food and what they get is not enough.

In fact, some villagers prefer to have the food on sale or perhaps to have meaningful food-for-work programmes to enable them to obtain money to buy food rather than depend on handouts. The only problem with food-for -work programmes has been that of favouritism or political interference.

It is not only those who are in need that are recruited. Even those who can afford end up being included in the programme. What happens in the end is that people do not do any work but are still paid.

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