ZIMBABWE: Not enough money to feed the hungry

Wednesday, September 19, 2007

The amount set aside by the Zimbabwean government to feed at least four million people identified as food insecure is "a mere drop in the sea", say analysts.

Finance minister Samuel Mumbengegwi announced in early September that the government had set aside Z$347 billion (about US$1.02 million at the parallel market rate) to buy food for 600,000 households it had identified as hungry, due to poor harvests after a combination of drought and critical shortages of inputs.

The government's budget allocation would "buy less", said John Robertson, a Zimbabwean economist, because of the rapidly depreciating Zimbabwean dollar and foreign exchange shortages.

Rates on the black market have been rising steeply, with one US dollar now costing about 340,000 Zimbabwean dollars, an increase of around Z$120,000 per US dollar since the additional money for relief was announced.

Renson Gasela, an expert on agriculture and a former chief executive officer of the state-owned Grain Marketing Board (GMB), pointed out that "in real terms" the money allocated by the government for the rollout of food would only buy about 40,000 metric tonnes (mt) of cereals.

In order to avert widespread hunger, particularly in the worst affected provinces of Masvingo and Matabeleland South and North, the government has already bought 500,000 metric tonnes (mt) of grain from Zambia and Malawi, leaving a net deficit of over 600,000mt to meet the national requirement, according to the official daily newspaper, The Herald.

Mumbengegwi also set aside Z$800 billion (about US$2.3 million) to import maize, and for the GMB to purchase grain from farmers. The newspaper said the allocation would put the government "in the driving seat in terms of drought relief purposes, ahead of non-governmental organisations [NGOs] and international donors, such as the World Food Programme (WFP)".

The amount seems small compared to the US$118 million appeal launched by WFP to provide immediate assistance to 3.3 million of the 4.1 million people that UN agencies estimate will be facing severe food shortages from now until March 2008. The remainder will be supported by NGOs, including the Consortium for the Southern Africa Food Emergency (C-SAFE).

Print money?

"The reality is that the central bank's foreign currency coffers are severely strained and, as has been happening in the past, the Reserve Bank of Zimbabwe will be forced to go to the black market to scoop out the much needed foreign currency," Robertson told IRIN. The time factor would also be critical in procuring the food, as the Zimbabwean dollar was depreciating in value at a fast pace.

Robertson speculated that since the government was "heavily burdened by both domestic and external debts" it could be left "with no option but to print more money and, in the process, push up inflation".

The government-controlled Central Statistical Office maintains that inflation is slightly over 7,000 percent, but the Consumer Council of Zimbabwe, a watchdog body, has said it had reached more than 13,000 percent.

In late June the government ordered prices to be cut by 50 percent and forced businesses to comply, but the exercise backfired as it led to widespread shortages in shops and in the manufacturing industry, with commodities surfacing in the black market at exorbitant prices.

Gasela said the GMB's silos were "virtually empty" because farmers were reluctant to sell the little they harvested for the poor prices the government was offering.

The government backtracked on its price-control policy in August, and since then prices have shot up again, further compromising food security: basic commodities such as maizemeal, the staple food, are now beyond the reach of the poor.

Maize prices in US dollar equivalents in three monitored markets - Harare, the Zimbabwean capital; Bulawayo, in the southwest, the second city; and the eastern city of Mutare - rose by 23 percent on average, from US$1.24 per kg in July to US$1.52 per kg in August, according to the USAID-funded Famine Early Warning Systems Network (FEWS-NET), which used the official revised exchange rate of Z$15,000 to US$1.

Rural residents have begun to work for food. Tapiwa Goronga, 48, a resident of Chikomba district, southwest of Harare, walks 15km to the village shopping centre three times a week, where he does odd jobs for the owner of a grinding mill, for which he is paid three kg of maizemeal.

"I did not harvest anything this year and the grinding mill is my only hope, otherwise my four children and wife would starve."

Source: IRIN