Tough year ahead, says UN report

Zambia faces a "daunting outlook" for 2003 with expectations of another poor harvest, says a report from the office of the UN Resident Coordinator. Food prices are "extraordinarily high ... with maize meal [prices] around double usual levels for this time of year". Also, there were "concerns over the prospect of another bad agricultural season after erratic rains delayed planting, and worsening rural poverty owing to the food crisis", the UN report said. The food crisis was brought about by a consecutive drop in food production in 2002 (down 40 percent on the previous five year average), due to drought. By the middle of 2002 inflation was at 23.7 percent and the national currency, the kwacha, had depreciated by 14 percent. "End-of-year inflation reached 26.7 percent and economic growth had slowed, to around 3 percent. Bank interest rates had risen to 49 percent," the UN report said. The Resident Coordinator's report noted that the release of funds by the International Monetary Fund (US $55 million) and other donors - the European Union, African Development Bank and Germany - in December "brought almost immediate relief to the kwacha - and some relief to many Zambians struggling to make ends meet". More good news was that the local currency gained value (15 percent) and maize meal prices dropped by 10 percent in many urban centres in the first week or so of January. The fall in the maize price followed threats that the government would intervene in the market if millers did not release sufficient stocks to bring prices down. "[The government of Zambia] has also opened up import licences for maize to new suppliers and removed the import tax on maize. It has also signalled that in future, [state] reserves would also be directed to small millers," the report noted. Since July, when the UN launched the Inter-Agency Consolidated Appeal for Zambia, and with the support and collaboration of key government and NGO partners, UN agencies have delivered around 30,000 mt of food to those in most need; distributed seeds and inputs to 60,000 farmers; and provided food for work rations to around 50,000 farmers. Close to three million Zambians are in need of food aid until the harvest in March/April 2003. "Currently, UN agencies are reviewing progress, and confirming priorities for the remaining six-month period of the Consolidated Appeal. A key priority will be to strengthen linkages between short-term interventions commenced in response to the drought with long-term development efforts. It is critical that achievements and capacity building efforts are sustained in the period beyond the current Consolidated Appeal," the report concluded.