SWAZILAND: Too much bread to buy a loaf

Sunday, December 9, 2007

The escalating price of bread is the latest blow to Swazi households, already struggling with a parallel rise in the cost of maizemeal caused by the worst drought in a generation.

On 10 December the price of a loaf of bread will jump by 10 US cents, and by the end of the year a loaf may cost US$1 in a country where over 60 percent of people live on less than US$1 a day, according to the UN Development Programme.

"Bread used to be called the white or rich person's maize, and maize was the Swazi's or poor person's bread, but now both are beyond reach almost, and it is making more people dependant on food aid," said Samuel Simelane, a food aid distribution officer at the village of Mliba, 100km east of the capital, Mbabane.

Simelane oversees the distribution of maizemeal, cooking oil and beans to double the number of community members who required such assistance last year: over 400,000 people out of a population of 970,000 now need some form of food aid to survive.

The World Food Programme brings in maize purchased in South Africa or donated by the US. The development agency, World Vision, is the primary distribution partner on the ground, while the UN Children's Fund (UNICEF) coordinates feeding schemes for primary school pupils, orphans and vulnerable children at neighbourhood carepoints.

Crippling drought is responsible for a decline of up to 80 percent in maize harvests in some parts of the country, although all four regions of Swaziland experienced drought-related crop reductions for the first time.

But the radically escalating price of bread is not related to Swazi weather; no wheat is grown in the country. Rather, the issue is the government's desire for tax revenue. Through its price-fixing arm, the National Agricultural Marketing Board (NAMBoard), an 8.5 percent levy is fixed on all wheat imported into the country.

"Swaziland, the nation with the worst food crisis per capita in the southern African region, has the most expensive flour in the region. This is because of government tax," said the manager of an industrial bakery who preferred that his name not be used.

Bakers are squaring off with government in an effort to further boost bread prices, already raised twice since August. The Bakery Association noted that the price of wheat had been rising by 15 percent to 25 percent per month since July.

Transport costs also add to the mounting bread price, averaging R200 (about $30) per tonne of wheat imported from South Africa. Bakeries say they can no longer absorb the high cost of flour without passing on the increases to consumers. If forced to shut down, they warned that 2,000 jobs could be lost in a country where formal-sector unemployment is above 40 percent.

NAMBoard was set up to find markets for Swazi agricultural output, but critics say it does little more than supply some local produce markets and impose protectionist tariffs on imported agricultural products.

Some of the import levies collected go to NAMBoard operations, and consumer groups have called upon government to use the large surpluses that have been accumulated to subsidise the price of staples like bread and maize, and assist farmers by reducing the price of agricultural inputs like seeds and fertiliser.

"Stakeholders in the agro-industry do not understand why government is charging wheat importers this levy because there are no farmers producing wheat in Swaziland, so who needs to be protected from unfair competition?" asked Sipho Shongwe, a spokesman for Swaziland Livestock Technical Services.

Jeremiah Ngubane, a shopkeeper and restaurant owner in the central commercial town of Manzini, told IRIN, "This is all about tax revenue for government. Why are they taxing food during a food crisis? It makes no sense - it's just greed."

How big is a loaf?

Some bakeries are coping by cheating, and stories about undersized loaves of bread feature extensively in the local media. The Times of Swaziland sent out a crew with a scale, and found shops selling bread as small as 640g a loaf, when the government gazette stipulates 800g.

The scoop inspired Enterprise and Employment Minister Lutfo Dlamini, whose ministry negotiates commodities prices, to tour shops with his own scale, making sure that photographers were on hand.

Dlamini's stunt was criticised in the press as grandstanding in anticipation of next year's parliamentary elections, at a time when bread prices are causing real pain among working-class Swazis.

"For the life of me, I can't begin to understand what the heck he is doing out there weighing bread, when he should be ensuring that his ministry has adequate staff to do the job regularly," said political observer Wilton Mamba.

Government has blamed escalating global wheat prices for the country's bread crisis, even citing the diversion of grain crops for biofuel production in the developed world as a cause for an increasingly unaffordable loaf of bread in Swaziland; it has not responded to calls for lowering or eliminating tariffs on imported wheat and other foods.

"We will have a crisis with food donors, who are now keeping so much of the population alive," predicted food aid distributor Simelane. "They will ask why government is not doing more to make food affordable."

"If government needs tax revenue, why doesn't it clean up corruption?" asked shop owner Ngubane.

Finance minister Majozi Sithole told parliament last week that government receives only 20 percent of the customs duties due to it because of the under-declaring of goods and other cheating at border posts. Since 2004, he has reported annually that the amount of money lost to government through various forms of corruption is equal to the nation's annual debt.

"But not one person has ever gone to jail for corruption in Swaziland," said a bitter Ngubane. "Instead, the average person cannot afford the price of a loaf of bread."

Source: IRIN