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Socialist Party (SP) president, Fred M’membe, has described the issuance of a Statutory Instrument to remove duty on the importation of mealie meal as a really desperate measure.
Finance and National Planning Minister, Situmbeko Musokotwane, on Tuesday in Lusaka announced that the government has signed a statutory instrument to provide for suspension of duty on mealie meal.
M’membe in a statement on Wednesday in Lusaka however said the real issue that needs to be addressed is parity pricing in the region because Zambia’s maize is too cheap in comparison to other countries, which puts pressure on the country’s crop.
He has since proposed that government should allow regional market prices to prevail in Zambia in order for the issue of smuggling to be mitigated.
“However, the consequence of that is that mealie prices will sky rocket to K400 to K500 per 25kg bag, which the government knows can cause civil strife. Despite duties being waived, the imported product will almost definitely land at a higher price than local product,” M’membe said.
He noted that a 25 kilogramme bag of mealie meal in South Africa is presently retailing at R240, and when transportation and insurance costs and also financing costs from the banks, and the landed costs are added, it all comes to K300.
Read More:Govt suspends duty on mealie meal, signs statutory instrument to support measure.
M’membe said even under this duty waiver, the export pressure given highly lucrative prices in neighbouring countries will still incentivise the smuggling of the imported mealie meal.
“Sadly, the Food Reserve Agency (FRA) stocks have been depleted due to careless release of the maize reserve and, as alluded in my previous articles, we do not have a fallback position,” he said.
M’membe said it is unlikely that the Minister of Finance’s Statutory Instrument will help solve this problem until parity price in the region normalizes.
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