Zimbabwe President Emmerson Mnangagwa appeared to disown a key plank of Finance Minister Mthuli Ncube budget for 2020 that removed subsidies on maize meal and rice.
“I am restoring it so that the price of mealie-meal is reduced. They had not consulted the president,” President Mnangagwa told a rally of ruling party supporters.
In the budget read earlier this month, Prof Ncube had made freeing key sectors of the economy – grain, energy and finance – to market forces a priority to remove parallel markets that had become more divergent as the economy reels from drought and currency shortages.
This has fuelled inflation to just below 400 per cent officially and well above 500 per cent by independent counts. Foreign currency for imports which would address domestic shortfalls is in short supply.
The freeing of the country’s staples to market forces sparked a sharp increase in their prices as retailers responded to wholesalers selling a tonne of maize at $235, double the price before the subsidies were removed. The high cost sparked outrage in the country.
“The issues of the mealie-meal price affect a lot of people and we cannot remove the subsidy,” President Mnangagwa said on Thursday, exposing the fissures at the top policy organs as the government seeks a way out of a decade long economic crisis.
Zimbabwe early this year stopped subsidising fuel in line with other austerity measures aimed at stemming inflation. This has seen prices go up almost every week as the re-introduced local currency rapidly loses.
President Mnangagwa’s intervention, however, only offers temporary respite at the food table with the country projected to run out of maize, the staple food, within weeks.
“At best there will be further massive hikes in food prices which have increased five-fold since the beginning of the year,” said Verity Johnson of the Catholic Agency for Overseas Development (CAFOD).
In a new report, CAFOD said severe bread shortages had pushed up its prices 15 times from a year ago, forcing parents to forego meals for the sake of their children.
“People are already dying from poor malnutrition and disease as health provision fails, but this could substantially increase,” Ms Johnson added.
The United Nations estimates that 7.7 million, half of Zimbabwe’s population, do not have enough to eat.
Operations at public hospitals have been at a standstill since September after junior doctors went on strike demanding salaries pegged in United States dollars.
Specialist doctors, who have been attending to emergencies, joined the strike this week after the government fired at least 450 of the striking junior doctors.
The country has also been experiencing serious electricity shortages that have resulted in 18-hour daily power cuts.