GOVERNMENT has suspended import duty on wheat for selected importers amid concerns that bread prices could shoot up following an introduction of the levy early this year.
Report by Business Reporter
According to a statutory instrument published last Friday — with effect from that day — no duty would be levied on approved wheat importers as the country perennially fails to meet annual demand of the cereal.
“With effect from the date of publication of these regulations, duty is suspended on wheat flour imported by approved wheat importers,” read part of the statutory instrument.
The list of approved wheat importers are mainly members of the Bakers’ Association of Zimbabwe.
Finance minister Tendai Biti in consultation with Agriculture minister Joseph Made — according to the statutory instrument — shall approve a list of wheat flour importers for the purpose of this suspension.
Following threats by the Bakers’ Association of Zimbabwe over an increase in the price of a standard loaf to $1,20 from $1, the National Economic Consultative Forum (NECF) convened a meeting with stakeholders which noted that the country required 300 000 metric tonnes of wheat per annum.
The NECF advised a freeze on the current prices until new measures were introduced.
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The meeting further noted that 70% of the tonnage would be milled locally, while the remaining 30% would be imported as flour. The 30% import quota attracted a 5% duty, while anything above attracted duty at 20%.
Records show that duty on flour imports had always been pegged at 20% prior to dollarisation. It was only reduced to zero and then increased to 5% due to economic circumstances the country was experiencing at the onset of dollarisation in 2009.
It was also clear that the country was realising a saving through importation of wheat as opposed to flour.
The NECF also observed that the country was spending $27 million to import flour and $19 million on wheat imports, realising national savings of $8 million.
It, however, advised that there was need to improve the quality of locally-produced flower to save the industry from collapse.
