Govt To Scrap Subsidies On Maize, Wheat; Prices Expected To Run Away

Finance and Economic Development Minister Mthuli Ncube said that the government will, with effect from January 2020, end subsidies for maize and wheat.

Ncube made the announcement on Thursday during is 2020 budget presentation. He said:

The current subsidy policy whereby Government funds the procurement of grain at market price and sell this to registered grain millers at a subsidised price has been open to abuse and placed a huge burden on the fiscus.

At times the intended beneficiaries do not enjoy the benefits of the subsidy from Government.

To address these distortions, Government, will, with effect from January 2020 remove the existing grain marketing subsidies for maize and wheat that were being provided to Grain Millers through the Grain Marketing Board.

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The intervention will see GMB selling wheat and maize at market prices, with Grain Millers having an option to either import or purchase grain from GMB.

The government has been subsiding the country’s major staple grains in a bid to keep the price of mealie meal and bread within the reach of the majority of citizens.

Ncube admitted that the scrapping of subsidies will result in an adjustment in the prices of mealie meal and bread.

More: NewZwire