US embassy cable - 02HARARE1802

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