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Zimbabwe Retailers Urge Abolition of Duties on Imported Maize Meal, Oil

Finance Minister Tendai Biti said in his mid-year budget statement that his intention in re-introducing import duties on maize meal and cooking oil was to boost local producers - but maize and soy beans are in short supply

The Retailers Association of Zimbabwe said Thursday that the government should consider reversing itself on the restoration duties on imported maize meal and cooking oil as the move has boosted prices while local industries lack the capacity to produce such commodities in a market crippled by shortages of maize and soy beans.

Retailers Association President Themba Ndebele said market distortions caused by the renewal of a 15 percent duty on imported maize meal - a Zimbabwean staple in the form of the glutinous paste known as sadza - and a 40 percent duty on cooking oil has merely led local producers to raise prices to match the now higher-priced imports.

Ndebele said the organization is unable to prevent supermarkets from increasing prices of such basic commodities. He said the government should step in to correct distortions instead of threatening to take action against local retailers adjusting their prices.

Finance Minister Tendai Biti, who promised in his recent mid-year fiscal policy statement to monitor maize and oil prices, could not be reached for comment. Biti said at the time that his intention in restoring duties was to encourage domestic production. He must also generate new revenues to offset a projected deficit of hundreds of millions of dollars.

Ndebele said supermarkets will continue adjusting prices until the government abolishes import duties on the commodities."It is clear that the duties are affecting importers who have in turn passed the costs to consumers and the ripple effects are also being felt by local producers that are increasing prices too," Ndebele said.

Economic commentator Masimba Kuchera said it is unfair that consumers are taking the brunt of the impact of the restored import duties.

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