Zambia to use maize to rescue falling Kwacha

By Jeff Kapembwa

Lusaka – Zambia, the current grain basket in the Southern African Development Community (SADC), despite the drought that afflicted the region plans to export much of its 800,000 tonnes of corn expected to be secured from the country’s farming community to offset its free-falling Kwacha currency.

Zambia’s Kwacha, which has since the beginning of the year been free-falling, losing over 20 percent against other convertible currencies, has made the country’s cost of doing business high.

The depressed Kwacha, coupled with electricity shortages, has made the cost of living and that of doing business among various players and investors alike untenable with the private sector claiming to have lost 70 percent of their business.

However, President Edgar Lungu, seeking  countervailing measures to arrest the falling Kwacha, spurred by other related costs and the falling

copper prices on the international market has initiated measures to sustain the local currency, including securing adequate foreign exchange through exports of various products including maize to neighbouring countries.

Speaking in north eastern Zambia on the border with the Democratic Republic of Congo, President Lungu told a campaign meeting that Zambia

will export most of its maize to needy neighbouring countries so as to earn enough foreign exchange to offset the tumbling Kwacha.

“We need the dollar in Zambia for us to import what we need and simple common sense demands that we bring in (US) dollars for us to revive our economy. It is for this reason that I have ordered the central bank,

the Ministry of  Finance  to work together to see how we can bring in more dollars by exporting that which we produce,” he said.

“We have agreed that because there is a drought in the region, and most countries don’t have their own stocks of maize…we are talking about Zimbabwe, Botswana, Namibia, Angola, DRC, Malawi – they don’t

have maize! So, we have a market in the region and so we are going to buy all the maize in Zambia and export so that we bring in the dollars that we need,” Lungu said.

He directed the country’s Food Reserve Agency (FRA) to proceed and buy enough corn part of which will be used for the country’s food security while part it will be exported to needy countries.

According to the FRA, plans are underway to buy

800,000 tonnes instead of the initial 500,000 tonnes from local farmers in the country for strategic reserves. Much of the maize will be sold to neighbouring countries in dire need of food following a drought that

hit the region last rain season.

The poor rains during the 2014/15 rainfall season coupled with floods in other parts of the region has

affected the food security situation in the region.

Director for Food, Agriculture and Natural Resources at the SADC Secretariat, Margaret Nyirenda, says Botswana, Lesotho, Namibia,

South Africa, southern Angola and Zimbabwe experienced prolonged dry spells while Madagascar, Malawi and Mozambique experienced both floods

and prolonged dry spells.

The poor rainfall has compounded the food security in SADC, forcing the region to record lower than anticipated harvests of various

cereals including maize, wheat, rice, millet and sorghum, resulting in a deficit of  7.90 million tonnes  in the just ended season compared to

a surplus of 1.21 million tons recorded in 2014/15 marketing year.

“This year the Regional cereal availability is estimated at 40.40 million tons, representing a drop of 11.4 percent from 45.62 million

tonnes last year,” Nyirenda said on 14 August 2015 ahead of the 35th Heads of States and Government’s summit hosted by Gaborone in Botswana.

“It is important to note that this year availability of maize which usually makes up more than 75 percent of total cereal production is

forecast at 27.40 million tonnes compared to 36.79 million tons last year,” she said.

The total requirement for the region this year is estimated at 34.50 million tonnes against 31.73 million tonnes available, hence reflecting an

overall maize deficit of 2.64 million tonnes.

September 2015
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