LEGAL ALERT! Suspension Of Duty On Imported Mealie Meal

The Minister of Finance and National Planning Dr. Situmbeko Msokotwane has signed Statutory Instrument No 10 of 2023 to provide for the suspension of duty on imported maize (corn) flour (Mealie Meal). The Customs and Excise (Suspension) (Maize (Corn) Flour) Regulations, 2023, which were published in the Official Gazette and went into effect on April 6, 2023, include a provision that suspends duties on imported mealie meal.

Possible rationale for suspending duty on imported mealie meal in Zambia:

• Food security: One of the primary reasons for suspending duty on imported mealie meal is to ensure food security in Zambia. Mealie meal is a staple food in the country, and any disruption in its availability can lead to food shortages and increased hunger. By suspending duty, the government aims to encourage importation of mealie meal and increase its availability in the market.
• Price stabilisation: Suspending duty on imported mealie meal can help stabilize prices by increasing the supply of the commodity. In times of scarcity or high demand, prices of mealie meal can skyrocket, causing hardship for many Zambian households. By allowing duty-free imports, the government aims to reduce the cost of mealie meal and make it more affordable for consumers.
• Drought mitigation: Zambia has been facing recurring droughts in recent years, which have significantly affected agricultural production, particularly maize, the primary raw material for mealie meal. Suspending duty on imported mealie meal can help bridge the gap between local production and demand, ensuring that Zambians have access to affordable mealie meal despite unfavorable climatic conditions.
• Encourage competition: Allowing duty-free imports of mealie meal can promote competition in the market, leading to better quality and lower prices for consumers. Importers will compete with local producers, potentially driving innovation and efficiency in the industry.

Ramifications of suspending duty on imported mealie meal in Zambia:

• Impact on local producers: While suspending duty on imported mealie meal may have several benefits, it may also negatively impact local producers. Cheaper imports could outcompete local mealie meal, potentially leading to reduced sales and, in some cases, forcing local producers to shut down their operations.
• Loss of revenue for the government: Suspending duty on imported mealie meal means that the government will lose out on revenue from import duties. This lost revenue could have been utilized for various developmental projects or social welfare programs.
• Quality control concerns: Increased imports of mealie meal could lead to quality control concerns if imported products do not meet Zambian standards. Ensuring that imported mealie meal adheres to safety and quality standards may require additional resources and vigilance from regulatory authorities.
• Dependency on imports: Suspending duty on imported mealie meal may lead to increased dependency on imports for food security. This dependency can be risky, as it exposes the country to fluctuations in global commodity prices and potential disruptions in international trade.

Conclusion

In conclusion, while suspending duty on imported mealie meal in Zambia may have some short-term benefits, such as increased food security and price stabilisation, it may also have long-term consequences on the local mealie meal industry and government revenue. It is essential for the government to carefully consider these ramifications and implement complementary policies to support local producers and maintain food security in the long run.

Reagan Blankfein Gates

Managing Partner

Corporate Advisory Dept
Reagan Blankfein Gates Legal Practitioners*