Consumers hit at govt over maize price hike

Consumers Association of Malawi (Cama) has expressed displeasure over government’s decision to raise minimum selling price of maize by 46 percent.

In an interview on Sunday, Cama executive director John Kapito said the decision comes at a time consumers are already failing to afford the staple grain due to dwindling incomes amid the negative impacts of the recent 25 percent devaluation of the kwacha and the cost of living crisis.

He said: “This is the time we had waited for government to cushion consumers considering the impact of maize on Malawians. This is just July and we haven’t yet approached the lean season yet and a bag of maize is at K15 000, who would afford that?

“Why can’t government, at least, subsidise maize as the main staple food for Malawians? Why subsidise fertiliser other the actual maize?”

In a memo dated July 20 2022 addressed to Agricultural Development and Marketing Corporation acting general manager and copied to Secretary to the President and Cabinet, Secretary to the Treasury, Secretary for Agriculture Sandram Maweru said government has approved the adjustment of the selling price of maize from K205 per kilogramme (kg) to K300 per kg with immediate effect.

A snap survey in some of the produce markets in Blantyre showed that as of yesterday, a 50kg bag of maize was selling at an average of K17 500.

The development comes amid mounting pressure on inflation, the rate of increase in prices over a given period of time, which has been on the rise for the past months largely due to increase in food and non-food items.

In a space of six months, the inflation rate has nearly doubled from 12.1 percent in January to 23.5 percent as of June, according to the National Statistical Office figures.

In Malawi, maize as part of the food component, accounts for about 52 percent of the consumer price index, an aggregate basket of goods and services used in computing inflation.

Ironically, the Reserve Bank of Malawi (RBM) on Thursday maintained the policy rate, the rate at which the central bank will pay or charge commercial banks for their deposits or loans, at 14 percent but indicated that the central bank stands ready to adjust the policy rate upwards should inflationary pressures persist.

In its statement of the third Monetary Policy Committee, RBM Governor Wilson Banda said looking ahead, pressures on inflation are likely to continue largely due to persistence of supply-related shocks to food and energy prices.