Zimbabwe now identifying people to receive maize meal subsidy

Zimbabwe is now identifying vulnerable people that will be given food subsidies because the current subsidy is not targetted but is universal and is therefore being abused with some of the maize being exported.

Finance Minister Mthuli Ncube sold Parliament yesterday that production cost of a 10kg of roller meal is $91 so the current subsidy is $21.

Retailers were, however, selling the maize meal for prices ranging from $105 to $130.

“We initially set it at $50 per 10kg then we discovered that some unscrupulous and sharp people – maybe we have to give them credit as well but unscrupulous nonetheless decided to exploit the gap between the $50 and the current $102 for 10kg and making money out of it,” Ncube said.

“They were also exporting the roller meal. I have seen it in the neighbouring countries and so forth. We decided to close that arbitrage gap by increasing the price …to $70 just to close that arbitrage gap.”

Ncube said though the subsdised price had been increased from $50 to $70, this was still a huge subsidy.

“Let me be clear.  If you speak to the producers of roller meal Hon. Speaker, the cost build up price of roller meal is about $91 for 10kg.  On a cost build up, that is what they are spending and that is what our research tells us,” he said.

“So, even at $70 which is the new subsidised price, we are still getting the subsidy of $21 per 10kg.  It is quite major.  The cost build up price is $91 and that is what our research tells us.

“However, we know that the retailers are selling in the market for a much higher price than that.  They are looking at anything above $105; I hear some are selling at $130, so it is a huge price differential.”

Ncube said the government was now working on identifying people that really need the subsidy and 90 percent of the exercise should be completed by next week.

“We want to target the subsidy. You cannot target the whole population. That is not targeting but it is universal coverage. How are we going to get to the target – we have a methodology. So far we have collected names of the vulnerable,” he said.

“We have almost completed City of Harare as an area. We should be able to complete Bulawayo by close of business today. By end of next week we should have collected at least the critical 90% of the names of all those who are vulnerable across the entire 10 provinces.

“We have the names, date of births, phone numbers and ID numbers. That is how you target because you have to know the customer. It is a KYC issue and we are determined to have this database as Government. It did not exist before.

“Maybe we needed this crisis to search for this database and that is what we are doing just to make sure that we can target well and there is no wastage.”

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