Low economic growth worsens impact of food crisis

Ordinary Zambians are battling to cope with the effects of a food security crisis exacerbated by an economic slowdown. Joyce Mwenya is an example of the daily struggle faced by 80 percent of Zambians who live on less than US $1 a day. With a baby strapped to her back, the 33-year-old mother of three sells vegetables at the market in Kanyama, one of Lusaka's poor shanty towns. On a really good day, Mwenya could make up to 10,000 Zambian kwacha, about US $2. At the end of each month she needs to earn at least 35,000 kwacha, just under $8, to purchase a 25 kg bag of maize meal, the country's staple food. But Mwenya often falls short of her target, mostly because her customers are just as poor as she is, she told IRIN. Zambia's economy was dealt a blow earlier this year when the mining giant Anglo American pulled out of the Konkola Copper Mines - the country's largest investment project - citing high costs of production and low copper prices. The government's plans to grow the economy by 5 percent, and reduce inflation from 18 percent to 13 percent, have been thrown into disarray by that setback, and the current food crisis that threatens 2.9 million people, say economists. The inflation rate stands at 25 percent according to Citibank Zambia's latest Treasury Newsletter. "The inflation target of 13 percent is now out of reach, given that we are now in the last quarter of 2002. The food crisis, especially after the government rejected 'cheaper' GM [genetically modified] maize will take on a new significance as ... the cost of maize will either go up, or government expenditure will go up [as a result of] subsidising the maize," Ignatius Chicha, an economist with Citibank, told IRIN. Copper, Zambia's former economic miracle cure, is unlikely to help the government's balance sheet. The metal is responsible for 80 percent of Zambia's foreign currency earnings, yet copper prices have hit their lowest levels in 14 years. Finance Minister Emmanuel Kasonde said in June the goal of a 5 percent growth rate would prove elusive following Anglo's pull-out, and the food crisis caused by two successive poor harvests. Observers believe that a 2 percent or 3 percent growth rate was more realistic. "The food crisis is adding to the government's financial burden," Jetty Lungu, an economist at Project Concern International, told IRIN. When he visited Zambia last month, Andrew Natsios, the head of the US Agency for International Aid (USAID), warned that food prices would rise in November and December after current maize stocks ran out. "All these factors [the food crisis and low copper prices] are likely to push consumer prices up and therefore keep inflation high," Lungu told IRIN. Last year, the economy grew by the targeted 4 percent while inflation was contained at about 19.8 percent. Minister of Agriculture Mundia Sikatana, recently said that the government would import up to 156,000 mt of non-genetically altered maize. The government would contract the private sector to import an additional 300,000 mt to avert hunger and prevent prices further escalating. New figures from a needs assessment coordinated by the Southern African Development Community, point to an extra 600,000 Zambians in need of food aid before next year's harvest, compared to UN estimates made in May. Humanitarian workers told IRIN that insufficient timely imports of commercial maize, and already rising maize prices in the markets, had deepened Zambia's food crisis.