Millers’ scam bleeds GMB . . . Sell subsided maize at 200 plus profit . . . GMB retaliates, cuts supplies by 40pc

Source: Millers’ scam bleeds GMB . . . Sell subsided maize at 200 plus profit . . . GMB retaliates, cuts supplies by 40pc | The Sunday News November 17, 2019

Millers’ scam bleeds GMB . . . Sell subsided maize at 200 plus profit . . . GMB retaliates, cuts supplies by 40pc
Prof Mthuli Ncube

Sunday News Reporter

MILLERS are allegedly engaged in massive corruption, where they access cheap maize from Grain Marketing Board, mill  a small portion and then divert the rest to rural areas especially those near the country’s borders where they sell it to desperate villagers in foreign currency.

As a result, Government has come down on some millers and cut supplies by about 40 percent. Before, millers used to get unlimited amount of maize from GMB at a subsidised cost of about $726 per tonne. Investigations by Sunday News revealed that some millers, after receiving the maize would mill a small portion and take the rest of the grain to rural areas where it is sold in foreign currency or at very high prices. Some of the maize is said to have found its way to Zambia, where it is sold to foreign nationals in Victoria Falls.

At the subsided price, a 50kg bag of maize costs $66 from GMB but millers and their cartels would then sell the same bag at R200 which is more than $210. At these margins, millers are reportedly pocketing as much as $2 310 from a tonne they would have bought at $726, making a profit of $1 584 which is 218 percent, without breaking a sweat. Sources in the industry said the millers were exploiting the facility, and were also running away from other related costs.

“Electricity costs to mill have gone up and besides most of the millers are situated in areas which are being affected by load shedding. So, now the millers are simply taking the maize cheaply from GMB and selling it to villagers especially in areas where they know there is abundant foreign currency. At this rate they are making the money without an extra cost of milling, packaging and other related costs,” said a source.

At one time, some millers came under fire as they were reportedly buying maize from GMB at low rates and then resell the maize to the parastatal at high prices. GMB is buying maize from farmers at $1 400 per tonne. Sunday News discovered that some companies that were milling, were also involved in corruption by taking the mealie-meal to rural areas and places where gold panners are found, where it is sold in foreign currency.

Last week, Sunday News was told that mealie-meal in Kezi was being sold in mobile trucks and a 50 kilogramme bag was going for R300 while in Binga some of the cartel members are exchanging a 10 kilogramme bag of mealie-meal for a goat. The cartels either resell the goats or exchange for cattle. “Four goats can then be exchanged for a beast meaning that just 40 kilogrammes of mealie-meal can buy you a cow. The people who are doing this also know most of the cattle are not in good condition because of drought so they can even bargain. After buying the cattle for less than $400 worth of mealie-meal some just take them for fattening and resell them for as much as US$400,” said one of the people familiar with the deals.

Grain Millers Association of Zimbabwe (GMAZ) president Mr Tafadzwa Musarara said he could not comment on the issue. “This is too sensitive, so no comment,” he said.

GMAZ spokesman Mr Garikayi Chaunza had earlier confirmed that GMB has reduced supplies to the millers. In a statement attributed to GMAZ deputy chairman, Mr Masimba Dzomba who is in charge of the association’s Southern region, the millers hit back and said the move by GMB would see them reducing their supplies to retailers.

“I can confirm that our maize supplies from GMB have been reduced by plus or minus 40 percent and this means that we will not be able to supply mealie-meal to all retail shops in our sphere of influence, not because we do not have the capacity but simply because we will not be having the raw material (maize) to mill,” said Mr Dzomba.

Contacted for comment GMB general manager Mr Rockie Mutenha declined to comment and referred questions to the Ministry of Lands, Agriculture, Water and Rural Resettlement. “It is the ministry that comes up with such directives, so you will need to talk to them,” he said. Deputy Minister Cde Vangelis Haritatos said such issues also needed to be talked about “at high levels.”

He said: “What I know is that sometimes the maize is not enough to cater for every miller.”

Finance and Economic Development Minister Professor Mthuli Ncube, while presenting his 2020 budget on Thursday, last week alluded that Government was aware of the leakages that were happening in the selling of maize to millers at subsidised rates. He said the subsidy policy whereby Government funds the procurement of grain at market price and sell to registered grain millers at subsidised price, has been open to abuse and placed a huge burden on the fiscus. He said the subsidy will be scrapped from next year.

“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. 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. This means the prices of basic commodities such as bread and mealie-meal may adjust,” he said.

However, to protect the vulnerable, Prof Ncube said the Government will extend targeted subsidies on the production of roller meal, cooking oil and the standard loaf of bread. 

COMMENTS

WORDPRESS: 4
  • comment-avatar

    Yet other rip off! what actually works legitimately?

  • comment-avatar
    dr solomon 3 weeks ago

    Nothing should ever be subsidized. Pay vulnerable people a living allowance instead. That includes removing subsidies from fuel, maize meal and agriculture. Subsidies create an unnatural economy with vices no policing can defeat so rather keep out of it.

  • comment-avatar
    ace mukadota 3 weeks ago

    Abolish all subsidies comrades – why should peter be robbed and the money given to the rich paul who is a ZANUPF chef or big wig

  • comment-avatar
    ace mukadota 3 weeks ago

    On the New York Stock Exchange this sort of trading is called”arbitrage”.
    Buying something in one market & selling it in another. ZW is full of people who would do well on the NYSE. When is the ZANUPF govt going to wake up to harsh reality comrades ?