Zupco subsidy a red herring: MPs

FINANCE minister Mthuli Ncube (pictured) has come under fire from legislators over subsidising mealie-meal at 25% compared to Zupco’s 80% subsidy amid widespread hunger.

BY TATIRA ZWINOIRA

During a Parliament sitting on Wednesday, legislator for Harare North constituency, Allan Norman Markham (MDC) asked Ncube why the country’s staple food is receiving a lower subsidy than Zupco.

“I have a problem subsidising Zupco to the quantity of 80% and yet basic foods where people are hungry, and you see queues all over you are subsidising to the tune of 25%. I cannot see how you can subsidise transport to 80% and people who are hungry only get a subsidy on roller meal of 25%,” he said.

In December 2019, government introduced a mealie-meal subsidy pegged at ZWL$50 per 10kg bag in order to protect vulnerable groups.

However, as hyperinflation continues to spiral, amid a depreciating Zimbabwe dollar, government this week raised the price per 10kg bag to ZWL$70 as millers complained that the maize subsidy was hurting supply.

Based on Treasury research, the cost build-up price of roller meal is ZWL$91 for 10kg and at ZWL$70, the subsidy government is giving is ZWL$21.

Despite the subsidy, retailers are selling the mealie-meal between ZWL$105 and ZWL$130, negating the intended benefit of the subsidy and making the staple food more expensive.

In December 2019, the Parliamentary Portfolio Committee on Local Government revealed that the Zupco subsidy was costing Treasury ZWL$51 million a month, and was not sustainable.

All this comes as eight million people are facing hunger, according to the United Nations.

“Minister, if you hear that people are dying of hunger, are you going to further inflict them by killing them? My suggestion is that when you saw that the black marketers were selling at a high price, was it not right to do for example what you did with the transport situation?” Kwekwe Central MP Masango Matambanadzo (NPF) asked.

“You came up with the Zupco project which actually led to a decrease in fares in the private commuter omnibuses. You fought that situation well, but this current development of increasing mealie-meal prices, have you assisted the ordinary person or you have further burdened them?”

In response to Markham, Ncube said: “Of course we continue to evaluate the relativity of those subsidies — which one should be higher, which one should be lower, should it be at the right level and, in fact, the recent review as of yesterday of the roller meal subsidy price is a result of that kind of analysis.

“If he is saying that we should review the Zupco subsidy and other subsidies, we continue to do these things. We may change it in future, and we may not, but that is normal. I do not think we want to compare one subsidy to another.”

He added: “If you think about it, if the fuel price has increased which it has, it is even more imperative to subsidise transportation for the vulnerable than before. It makes sense to subsidise fuel to this extent.”

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