Home BusinessBanking Zimbabwe: Envisaged Maize Import Break to Save RBZ U.S.$14 Million Per Month

Zimbabwe: Envisaged Maize Import Break to Save RBZ U.S.$14 Million Per Month

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The Reserve Bank of Zimbabwe (RBZ) stands to save around US$14 million monthly from an envisaged maize importation break in the 2020/21 post-harvest period amid a bumper harvest expected this year.

A poorly planned land reform process by government coupled with recurrent drought periods in past two decades saw the country’s mainstay agriculture’s fortunes plunge, forcing authorities to resort to imports to meet the national cereal demand.

This has however come at a cost as the country has been scrapping the barrel to source for scarce foreign currency to import its food needs.

However, the gods have smiled on the country this rain season with yields set to triple, according to authorities.

The newfound luck also has a positive bearing on the national purse.

Information released by cabinet this week indicated that an estimated national production of 2.5 to 2.8 million metric tonnes of maize and 360 000 metric tonnes of traditional grain were expected based on the promising bumper harvest in 2021.

“On the basis of the afore-stated estimates, deliveries to the GMB are expected to be 2 million metric tonnes of cereals in the form of 1.8 million metric tonnes of maize and 200 000 metric tonnes of traditional grains,” Information Minister, Monica Mutsvangwa said in a briefing this week.

With the central bank’s monthly economic review publications showing that the apex bank has been spending US$13 million monthly average on maize importation, such foreign currency could be saved and redirected for other meaningful uses in the post 2020/21 harvesting period.

Depending on the quantum of wheat yields which are yet to be shared, more savings are likely to be realised from the current average US$7.7 million spent monthly on the commodity.

Presenting a Monetary Policy Statement recently, RBZ governor, John Mangudya acknowledged the positive impact to be derived from the impending good harvests.

“Increased food production due to a favourable agriculture season will subdue inflationary pressures in the short to medium term. As a result, the economy is expected to continue experiencing a gradual disinflation from the 362.6 percent annual inflation in December 2020 to below 10%,” he said.

The envisaged economic growth of 7.4% in 2021 by end of December 2021 was also forecasted in the policy.

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