Experts say good rains and proper planning in Zimbabwe last year have resulted in better prospects of a bumper harvest. Zimbabwe is expecting a 199 % increase in maize harvest this year.
However, there are worries that if the Grain Marketing Board is not well funded, farmers may not deliver the grain.
The other issue is that if the ZWD $ 60 billion, set aside for grain purchases is not well funded, it may drive inflation which has been on the decline lately.
Economist, Dr Prosper Chitambara says it is critical to avoid funding this grain provision through creation of money as this will result in inflationary pressures. He further emphasized the importance of maintaining both monetary and fiscal discipline as an ongoing ingredient towards macro-economic stability.
Despite anticipated liquidity associated with farmers’ payouts, the Chief Executive of the Zimbabwe National Chamber of Commerce, Mr Christopher Mugaga predicts a further decline in inflationary pressures that could lead to deflation and price decline by 2022.