HON. GOZHO asked the Minister of Finance and Economic Development to explain Government’s policy regarding rollermeal subsidy considering that there are still shortages of the commodity?
THE DEPUTY MINISTER OF FINANCE AND ECONOMIC DEVELOPMENT (HON. CHIDUWA): Government introduced the roller meal subsidy in December 2019 and this followed the removal of the grain subsidy to millers through GMB. The motivation of this roller meal subsidy was to remove the subsidy on grain to millers which was judged to be inefficient and ineffective since the targeted beneficiaries were not benefiting from this subsidy. Thus, in the 2020 National Budget, Government indicated that it was going to introduce a new targeted subsidy for roller meal.
The subsidy was targeted at 40000 metric tonnes of maize which was used for milling 32000 metric tonnes of roller meal maize at an extraction rate of 80%. In December 2019 when the subsidy was introduced, it was envisaged that the Government was going to make savings of $70m per month or $844m per year from paying subsidies through roller meal instead of grain. The roller meal which is costing $103 per 10kg resulted in Government paying a subsidy of $53 per 10kg and the consumers were paying the other $50. Currently, the price of 10 kg roller meal is $286. Government is paying a subsidy of $216 and the consumer pays the balance of $70. The subsidy is based on the GMB maize selling price of $16 028.64 per metric tonne to millers.
Treasury has availed resources amounting to $813 110 525 towards the implementation of the new roller meal subsidy. However, given the administrative burden associated with implementing the maize roller meal subsidy, Government is introducing a targeted cash transfer system to vulnerable households. This system will result in the phasing out of the roller meal subsidy as beneficiaries will be given cash to purchase the roller meal on their own.
Government through the Ministry of Finance and Economic Development; Public Service, Labour and Social Welfare partnering with Netone are currently in the process of registering vulnerable groups in all urban areas in order to disburse cash transfers to vulnerable households. Once registration is complete then the proposal is to cease roller meal subsidy through millers as the vulnerable households will be receiving cash transfer that will enable them to buy roller meal and other basics from the market.
As of shortages of roller meal, this is partly driven by the shortage of grain owing to two consecutive rain season of 2018/19 and 2019/20 characterised by drought. There are also other factors which include malpractices by players within the value chain system and these can be best explained by the relevant Ministry of Industry and Commerce.
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