Poor macro-economics threaten food security


PERSISTENT poor macro-economic challenges remain the key driver of the near-record levels of rural and urban food insecurity, a new report produced by FEWS Net shows.

The report comes hard on the heels of the recent 10-day visit by United Nations Special Rapporteur on the right to food, Hilal Elver, who concluded that Zimbabwe was facing “man-made starvation”.

According to Elver, because of hyperinflation that has reached some 490%, more than 60% of the population is now “food-insecure”, in a country once regarded as the breadbasket of Africa.

“The persisting poor macro-economic environment continues to impact livelihoods and remains a key driver to the near-record levels of rural and urban food insecurity. The high parallel market exchange rates for foreign currency still largely influence the pricing of most goods and services. This is impacting a large proportion of the population whose earnings in local currency are vastly eroded,” said FEWS NET, in its November 2019 report.

“Despite the introduction of new notes and coins for the Zimbabwean Dollar in early November, shortages of the local currency remain and have brought back long bank queues and is promoting the continued sale of local notes and coins on the black market.”

FEWS NET is the food security arm of the United States Agency for International Development

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According to the FEWS NET report, some of the macro-economic challenges include local currency notes and coins that continue to be sold on the black market due to shortages, despite the introduction of new notes and coins in early November. The parallel market exchange rates for foreign currency continue to increase and influence the pricing of goods and services, thus driving hyperinflation.

“Prices remain significantly above average and continue to increase. Some goods and services are being charged in US Dollars or South African Rand despite the ban on foreign currency usage, implemented in June. Additionally, weekly fuel price increases continue to pose upward pressures on the prices of goods and services,” FEWS NET noted.

“In the 2020 national budget pronouncement in November, the government has removed the maize grain subsidy to private millers. This has already resulted in a near doubling of maize meal prices at the end of November and will likely result in shortages of maize meal on the markets as millers source for own-stocks in-country (at market prices) or through imports amidst critical foreign currency shortages.”

Following presentation of the 2020 national budget last month, President Emmerson Mnangagwa promised that government would retain grain subsidies to prevent further price shocks that were fuelling hyperinflation.

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