Online Reporter
Online Reporter
Treasury has backed revised levies aimed at protecting local farmers, financing irrigation infrastructure and reducing Zimbabwe’s heavy dependence on imports.
A letter dated April 30, 2026 signed by Finance, Economic Development and Investment Promotion Permanent Secretary, Mr George Guvamatanga, endorsed the continued application of the levies and charges linked to grain imports under updated marketing arrangements for the 2025/26 summer season.
The endorsement follows debate triggered by a March 3, 2026 Treasury letter in which Mr Guvamatanga advised the Office of the President and Cabinet that Statutory Instrument 87 of 2025 was “ultra vires” of the Constitution and should be repealed.
But the latest correspondence from Mr Guvamatanga shows that Government later moved toward refining and operationalising the levy framework rather than abandoning the policy altogether.
The correspondence was addressed by Mr Guvamatanga to the Secretary for Agriculture, Mechanisation and Water Resources Development.
It discusses implementation modalities for grain marketing arrangements for the 2025/26 summer season and explicitly endorses the collection of levies tied to grain imports.
In the letter, Mr Guvamatanga acknowledged recommendations arising from a Joint Technical Committee co-chaired by deputy ministers from the Finance and Agriculture ministries.
He highlighted pricing disparities between import parity and local production costs, including a US$40 per metric tonne gap for maize and US$50 per metric tonne for soyabeans.
“These variances have material fiscal and market implications, particularly with respect to producer viability, import substitution and broader macro-economic stability objectives,” Guvamatanga wrote.
Treasury further endorsed maintaining a wheat blending ratio of 70 percent locally produced soft wheat and 30 percent imported hard wheat.
While describing the ratio as neutral to domestic price stability, Treasury stated that imports exceeding the prescribed threshold should attract “an appropriate levy or charge” to ensure parity between imported and locally produced commodities.
The latest letter also formally designated the Agricultural Marketing Authority (AMA) as the collecting agent for the levy at permit issuance stage.
According to Treasury, revenues collected would accrue to the Consolidated Revenue Fund and, subject to parliamentary appropriation, would be ring-fenced for farmer payments through the Grain Marketing Board and financing of smallholder irrigation development programmes.
Treasury additionally instructed that monthly reports on levy collections, import volumes and utilisation of funds be submitted to enhance transparency and monitoring.
The latest communication appears to represent a shift from Treasury’s earlier position contained in the March 3 letter, which had argued that SI 87 of 2025 improperly imposed what amounted to an import duty outside the legal framework of the Customs and Excise Act.
But the latest development indicates that Government may now be pursuing a modified legal and administrative framework for the levies, potentially addressing concerns raised in the earlier legal opinion, while preserving the broader policy objective of supporting domestic agricultural production and reducing import dependence.
Analysts maintain that the levies are part of a wider import substitution and localisation strategy intended to stimulate domestic grain and oilseed production, protect local farmers and finance irrigation infrastructure critical to national food security.
They also note that Government policy under National Development Strategy 1, National Development Strategy 2 and Vision 2030 consistently prioritises reducing dependence on imports and strengthening local productive sectors.
They further argue that the levies are not merely revenue-raising instruments, but strategic interventions designed to rebuild local agricultural capacity and reduce Zimbabwe’s growing import bill, which officials estimate exceeds US$4 billion annually for goods that can be produced domestically.
The proposed levies have received growing backing from farmer unions, agricultural stakeholders and senior Government officials, who argue that the measures are critical for protecting local producers, financing irrigation infrastructure and strengthening Zimbabwe’s food security strategy ahead of anticipated El Niño risks during the 2026/27 agricultural season.
Authorities say the levy framework is designed not only to discourage excessive imports, but also to reduce Zimbabwe’s rapidly rising import bill, which officials argue has become unsustainable for the economy and foreign currency reserves.
Speaking during the 392nd Ordinary Session of the Politburo in Harare recently, President Mnangagwa said Zimbabwe was repositioning itself within global value chains as a producer of value-added goods rather than remaining dependent on imports.
“Zimbabwe is steadily taking a seat within the global value chain space, not as a mere supplier of raw materials but as a competitive producer of value-added goods,” the President said.
Vice President Constantino Chiwenga also recently defended Government’s import substitution and industrialisation strategy during the International Business Conference held on the sidelines of the Zimbabwe International Trade Fair in Bulawayo.
He said Zimbabwe’s economic transformation depended on building strong domestic industries capable of reducing imports, increasing exports and improving national self-sufficiency.
Speaker of Parliament Advocate Jacob Mudenda has similarly warned that Zimbabwe’s growing import bill was undermining industrial growth and national sovereignty.
“The import bill continues to exert an inexorable stranglehold on the economy, draining foreign currency and steadily corroding the very foundations upon which national prosperity must be built,” Adv Mudenda said recently.
Government figures indicate that Zimbabwe’s import bill has risen sharply in recent years, with large grain imports following successive drought seasons contributing significantly to foreign currency outflows.
Officials say the levy-funded irrigation programme is intended to reduce future dependence on imports by expanding domestic production capacity.
Authorities report that approximately US$5,7 million has already been raised through the levy framework, with part of the funds channelled toward irrigation projects across several provinces.
Farmer unions have largely supported the measures, arguing that guaranteed markets, stronger producer prices and expanded irrigation infrastructure are essential to stabilise rural incomes and protect the agricultural sector from recurring climate shocks.
However, the policy remains contentious among some millers and processors, many of whom have resisted localisation measures and continue to favour large-scale grain imports rather than expanding contract farming and domestic production support schemes.
Supporters of the levy framework argue that some of the companies opposing the measures have invested minimally in local production systems and instead prefer a “supermarket economy” model heavily dependent on imported grain and oilseeds, a trend authorities say has contributed to Zimbabwe’s rapidly growing import bill and persistent foreign currency pressures.
