OFFICIAL GOZ FIGURES ON FOOD IMPORTS AND PROJECTED

C O N F I D E N T I A L SECTION 01 OF 02 HARARE 001802

SIPDIS

STATE FOR AF/S, AF/EX
USAID FOR AFR/SA MCOPSON; DCHA/FFP LLANDIS, DSKORIC
NSC FOR SENIOR AFRICA DIRECTOR JFRAZER
LONDON FOR CGURNEY
PARIS FOR CNEARY
NAIROBI FOR PFLAUMER

E.O. 12958: DECL: 08/05/2007
TAGS: EAID EAGR PREL PGOV EFIN ZI
SUBJECT: OFFICIAL GOZ FIGURES ON FOOD IMPORTS AND PROJECTED
NEXT STEPS

REF: HARARE 01664

Classified By: CHG REWhitehead due to 1.5 (b) and (d).


1. (C) Summary. A senior Ministry of Finance official shared
with Charge details on GOZ food imports, and the gap still to
be filled. The GOZ has purchased nearly 1,000,000 metric
tons (MT) of maize but, even with current projected donor
contributions factored in, still faces a shortfall of
approximately 600,000 MT over the March 2002 to June 2003
period. A number of GOZ projections seem to err toward
optimism, as does much of the plan for filling the remaining
gap. End summary.


2. (C) On August 2, Ministry of Finance and Economic
Development Permanent Secretary Nick Ncube (strictly protect)
passed charge a full list of contracted GOZ maize purchases
and a brief worksheet totaling projected needs against
projected stocks. Somewhat to our surprise, this material
indicates that the GOZ has already purchased 982,112 MT of
corn. Ncube stated that the GOZ has already paid in full for
this amount from cash on hand and forex sequestered by the
Reserve Bank from tobacco sales. Of the total amount,
347,870 MT have already arrived in country; an additional
637,011 MT will be delivered over the next months.


3. (C) Ncube provided a list of sellers that include Cargil
(sic) (253,000 MT contracted, 255,585 MT already delivered),
FSI Petta Trading (4,255 MT of which 3,850 delivered),
Farmers World (10,000 MT of which all but 29 delivered),ADM
Agri (10,000 MT of which all but 4 delivered),Blazepoint
(4,637 MT delivered),Holbud (209,000 MT of which 63,649
delivered),CBZ Sentry (456,250 not yet delivered),Timpani
(25,000 MT not yet delivered),and Taminsa (10,000 MT not yet
delivered). Based on the fact that the CBZ Sentry shipment
references a US contract number, we presume that this
shipment cannot be certified GMO-free.


4. (C) Ncube said that imports and committed imports added to
the estimated 500,000 MT of domestic production from last
spring yielded a total of 1,482,112 MT, balanced against
consumption needs of 2,400,000 MT over the March 2002 to June
2003 period, based upon a consumption figure of 150,000 MT
per month. This leads to a shortfall of 917,888 MT. The GOZ
was banking on potential early deliveries from January 2003
to March 2003 of 200,000 MT from irrigated winter cultivation
and early green maize. On top of this, they projected donor
contributions as 150,000 MT based upon an assumed figure of
USD 41 million, and maize imports running USD 250/MT. This
left a shortfall of 567,888 MT. Ncube said that these
figures were based upon belt-tightening, with most
Zimbabweans eating only breakfast and supper, and increased
maize substitution with potatoes, rice, wheat, sorghum, and
other grains.


5. (C) Ncube said that he projected the following steps as
the way forward to closing the 600,000 MT gap, which would
cost an estimated USD 150 million. First and foremost, the
GOZ hoped to mobilize additional donor support for 300,000,
which he admitted was an optimistic figure. The second step
would be mobilization of the private sector for the remaining
300,000 MT, assuming that the GOZ would allow private sector
imports. Finally, and most improbably (even Ncube admitted
this),the GOZ hoped to establish a foreign currency trust
account where donor groups would deposit their money for
maize supplied from the GOZ Grain Marketing Board (GMB),the
parastatal monopoly that is responsible for the 982,112 MT of
maize already purchased.


6. (C) Comment: We were surprised to learn that the GOZ has
scraped up the forex to pay for nearly 1,000,000 MT of maize,
but even this leaves a significant gap. A number of the GOZ
assumptions about filling the shortfall also appear to be
overly optimistic. The 200,000 MT from potential early
deliveries is by no means a certainty. Donor contributions
will predictably continue to increase over the next months,
although it is too soon to predict if they will reach the
450,000 MT mark posited by the GOZ. Private sector
participation remains a phantasm at this time, given the
absurdly skewed exchange rate, the concomitant unrealistic
GOZ-fixed price for maize meal, and continued GMB monopoly
over grain imports. The foreign currency account, which
would presumably replace the proposed UN forex trust account
for the private sector, would directly funnel donor forex
into government accounts and does not bear further
consideration. Ncube himself admitted that the blueprint for
addressing the food crisis contained a number of internal
contradictions, but intimated that political sensitivities
had required this approach. What Ncube did not mention is
the strain that the GOZ maize purchases will put on other
sectors that require forex to function: fuel, electricity,
medicines, et al. The bottom line is that the GOZ will be as
much as USD 1.5 billion of forex short of what it needs
through June 2003, as outlined reftel. End comment.
WHITEHEAD