Indaba Agricultural Policy Research Institute

Securing Food Systems and Trade in Zambia during the COVID-19 Pandemic

 

By Brian P. Mulenga, Alefa Banda and Antony Chapoto

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INTRODUCTION

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The outbreak of COVID-19 worldwide has affected all sectors of the global economy as well as at country level. The food systems have not been spared by this outbreak, with developing countries, including Zambia, poised to be the hardest hit in terms of food system interruptions. For example, the supply chain for retail chain stores such as Shoprite, Pick n Pay and Spar may be af- fected due to the lockdown in South Africa, which could in turn interrupt the supply of imported foods to these shops with possibility of shortages leading to rise in prices. With regards to informal markets, where the majority of low income households purchase food from, more stringent movement re- strictions and closure of markets will result in a disruption of people’s liveli- hoods and incomes.

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Broadly, the food system in Zambia can be considered a dual system comprising; the rural who consume mainly from own production, and the urban who consume mainly purchased food from the commercial market. The urban category can further be categorized into two, the low income and the middle to high income groups. The low income group purchases most of the food from informal food markets where food is relatively affordable given their income levels, whereas the middle to high income group tend to rely considerably on chain retail stores such as Shoprite, Pick n Pay and Spar to mention a few.

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BROADER IMPACTS

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With the advent of the COVID-19, food supply systems are likely to be impacted through supply chain disruptions as follows:

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• In the event that the current restrictions on movements and business activities become more stringent, informal markets are likely to be closed, which will affect food access by the low income groups.

• Disruption of these informal markets will have a knock-on effect on in- comes and livelihoods of those that trade in these markets, as their 

• source of income and livelihood will be curtailed. This is likely to result in hunger and malnourishment of families that rely on these markets for income and food supplies.

• As a result of restricted movements and closure of markets, unemployment will rise particularly among those that rely on daily casual work in markets and bus stops. Also, informal traders will lose business hence their income will diminish.

• Closure of informal markets may also result in increased food waste especially for perishable food stuffs e.g. tomatoes, fruits and other vegetables.

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For the middle to high income group, food supply through the chain stores might be affected through restricted movement of trucks carrying food im- ports from South Africa to supply chain stores. Namibia, Zimbabwe, and South Africa announced that the flow of goods and services from reciprocal neighboring countries will not be interrupted. How- ever, it is realistic to expect delays in their move- ment. For example, Zimbabwe and South Africa on March 26, 2020 agreed to jointly close Beitbridge Border Post to non-residents, with only Zimbabwe- an residents allowed to travel north and South Af- rican residents to move south. However, cargo op- erations were not to be affected. The Zambia/ Chirundu border remains open for cargo. Never- theless, cargo has not been moving flawlessly from South Africa through Zimbabwe into Zambia. For example, the past two or so weeks has seen long queues of cargo trucks at Chirundu border post stretching almost 12 km, not because of COVID- 19, but because the ASYCUDA system upgrade did not go well resulting in delays in clearing the trucks. Now with COVID-19, there will be mandatory screening and road blocks to screen inland and in transit travelers adding to the already congested system. A snapshot of what is happening in other borders in the country is summarized in Table 1 (see).

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Another challenge that may face consumers is the likelihood of price gouging on essential commodities and basic food stuffs. There is an urgent need to monitor prices of basic commodities in various areas because some retailers may take advantage of the situation and price gouge on price-controlled essentials and basic food stuffs.

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For the rural population, to the extent that the current season’s harvest is good, they are less likely to be heavily affected compared to their urban counterparts in terms of food supplies as they mainly consume from own production. By most indications, the harvest this season will be better than the previous two seasons. However, due to COVID-19, markets are likely to be interfered with raising concerns of reduced sales and consequently incomes for the rural group. This is likely to impact negatively on rural livelihoods as farmers will struggle to procure inputs for the next season. To meet their immediate cash needs, rural households might resort to liquidating assets, thus compromising their resilience.

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IMPACT ON TRADE

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Trade, both formal and informal, has been affected by COVID-19. For example the Grain Traders Association of Zambia (GTAZ) has experienced a drastic reduction in trade activities by its members, particularly those involved in maize bran export. The reduction in maize bran exports has been occasioned by border controls and closures by importing countries in response to the COVID-19 pandemic. The knock-on effects of this reduction in export include loss of business and income for traders, as well as loss of employment for their border agents and other allied partners involved in maize bran export. Table 1 presents a summary of changes in trade activities at Zambia’s major border points.

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STATUS OF COVID -19 RESPONSES

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Government

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• Cabinet approved a CO VID-19 contingency and response plan with a budget of ZMW 659 million under the Disaster Management and Mitigation Unit/

• Ministry of Finance has set up an epidemic preparedness fund under the Ministry of Health amounting to ZMW 57 million.

• Government plans to suspend excise duty on materials that are used as inputs in producing products such as sanitizers.

• Ministry of Finance to work with Ministry of Commerce Trade and Industry and major retail outlets to build domestic value chains to promote domestically produced goods for supplying to the major chain stores.

 

Private sector

 

Private sector through representative associations such as Zambia Association of Manufacturers (ZAM) and Zambia Chamber of Commerce and Industry (ZACCI) have made recommendation to the Government, through the office of the Vice President, to help cushion the likely impacts of CO VID-19. Recommended measures include:

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• Defer payments of Value Added Tax (VAT), Customs Duty and Excise Duties for strategic importation (e.g. food, medicine, critical inputs for packaging sector, capital goods).​

• Government implored to allow movement of cargo and not travelling passengers at the border points. Develop protocols for managing the entry of critical supplies at the border.

• Engage countries in lockdown such as South Africa and establish government–to- government agreements for the supply of critical inputs and food to Zambia.

• Government to encourage export of mealie meal to meet rising demand in the region, while FRA focuses on strategic food reserves.

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IAPRI recommendations to mitigate the risks of the pandemic on food security and nutrition:

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• Restrict calls for protectionist policies: Zambia should not restrict movement of food commodities in and out of the country. Farmers will benefit from trade. A well-managed open border policy will reduce chances of neighboring countries reciprocating in future disasters and Zambia can become a reliable supplier of foods that it has comparative advantage to produce. This opens up opportunities for farmers and create employment in the rural areas. It is important to note that protectionist measures during the coronavirus crisis could provoke food shortages in the country and the region.

• Create opportunities for farmers through harnessing trade opportunities: With regards to grain supply, Zambia is in a better position than its southern and northern neighbors, Zimbabwe and DRC respectively. The staple grain industry is a big industry and if harnessed well can not only help Zambia become more food secure through opening other grain production opportunities during the year to stabilize local supply, but can also help the country earn foreign currency. These include promotion of winter and early maize. Therefore, taking advantage of these trade opportunities during this pandemic or post-pandemic will be very beneficial to the country. To remove any doubt, the country can pilot the management of part of its strategic reserve through buying an option on the Zambia Agricultural Commodity Exchange (ZAMACE) as a stand-by reserve for any unfore- seen deficits.

• Resist disrupting the production and supply of food: The impacts of closure of markets is likely going to disrupt the flow of food and agricultural commodities, loss of employment for casual labor, and income for informal traders. However, their operations may be a pathway through which the virus is spread. This catch 22 situation requires more thought to ensure that the country has a more measured response that will not greatly disrupt the food supply system, as well as not put people in danger of contracting COVID-19. First, the supply of labor to labor intensive crops such as fruits and vegetables needs to be maintained to ensure smooth supply of these commodities to wholesalers and retail shops. However, the Govern- ment needs to put safeguards to ensure that the health of these people is protected where they work. Second, instead of abruptly closing all mar- kets, there is need to consider the creation of tem- porary smaller satellite wholesale markets with con- trolled entry and exit in high density residential are- as. This will curtail movement of people travelling across town to go to the few major markets in ma- jor cities such as Lusaka, Kitwe, and Livingstone etc. One proposal is to have these markets on schools or church grounds that are closer to the people. Zambia National Farmers Union (ZNFU) could collaborate with the local councils to have orderly fruits and veg- etable markets that have limited operational times. Hand washing facilities and face masks can be provid- ed in such markets.

• Emergency COVID-19 Social Protection Fund/Programme: The Government and development partners should expand the social cash transfer programme to cover more poor and vulnerable people who may be affected by COVID-19 control measures. Food relief in areas such as Shang’ombo need to continue because the drought impacts experienced during the 2018/19 agricultural season are still being felt in the district.

• Enhance social distancing for the poor and vulnerable: The potential loss of income through strict adherence to social distancing will make it very hard for poor urban households who live in very densely populated compounds to follow the rules. To encourage social distancing as well as help provide daily supplemental energy requirements for low income and vulnerable households, the private sector should be encouraged to produce cheap high energy foods from local products for distribution. This innovation may assist with reducing the pressure on maize products especially if the situation worsens and Zambia needs to enforce a lockdown.

• Promote local industries and producers to fill up supply gaps to chain stores: Given that there will be delayed delivery of some imported food products, retail chains should consider increased local procurements to keep the food industry operational. The country cannot afford to disrupt the food systems as this will have ripple effects on the economy.

• Curb potential panic buying: Panic buying and hoarding of food is likely going to happen if the virus situation in the country intensifies. Not all individuals are altruistic hence more restrictive sales strategies such as “limit one or two per customer” may need to be employed if the situation arises. Essentially, people should be encouraged to buy what they eat or use without increasing waste especially for perishables.

• Monitor and punish price gouging enterprises: In crisis situations, some businesses want to profiteer from consumers. With a lot of people being laid off and losing their incomes, the number of people not able to afford basic food commodities and supplies is going to increase and their situation worsened if prices rise unjustifiably. So there is need for more frequent price monitoring of basic food commodities to ensure that businesses are not unnecessarily increasing prices. With this evidence in hand, price gouging enterprises can be taken to task using agencies such as the Competition and Consumer Protection Commission (CCPC).

• Reduction of food waste and loss: Private sector and households should be encouraged to invest in cheap food processing that can help prolong the shelf life of perishable food items. For example, increase the supply and demand for dried foods, e.g. dried tomatoes and vegetables. In addition, individuals should be encouraged not to panic-buy and hoard food commodities especially perishable foods.