Beef industry an export potential
Zimbabwe’s once vibrant beef export industry still has the potential to reorganise this big export earner according to analysts and market players.
According to reports, Zimbabwe used to earn around US$35 million per annum from commercial beef exports, with 80 percent of this meat coming from the commercial beef sector.
However, the commercial herd has now shrunk by over 60 percent in recent years to less than half a million head of cattle.
Economist Tinevimbo Shava noted; “This would have meant that beef’s contribution to the economy would be at par with that of tobacco, which contributes about US$500 million annually. However, this has not been the case. By 2000, the beef industry had all but crumbled. To date, there have been virtually no significant recorded exports of beef from Zimbabwe. But new developments can change the narrative.”
Through the African Continental Free Trade Area (AfCFTA), Zimbabwe has the chance to re-enter the global beef market.
African nations concurred to create a continental free trade area, which went into effect on January 1, 2021. About 90 percent of the current tariffs would be immediately be eliminated under the AfCFTA, and the other 10 percent designated as “sensitive” would be eliminated later.
In potential markets closer to home, like Mozambique, the Democratic Republic of the Congo (DRC) and Angola, beyond Southern Africa, Zimbabwe may access markets in the north, such as Egypt, where there is a substantial demand for high-quality premium beef, thanks to the AfCFTA.
Zimbabwe’s biggest meat processor and marketer, Cold Storage Company (CSC), also reopened for the first time after being dormant for two decades. This can cover the demand created by the markets.
The Cold Storage Company was formed in 1937. According to an article published by Pindula on November 4, 2019, after the adoption of the Economic Structural Adjustment Programme (ESAP), the government deregulated the industry in 1992. This allowed competition from private players where CSC enjoyed a virtual monopoly. This had a negative impact on the company as it plunged into a viability crisis following a drastic decline in cattle throughput. Within a year, the company had lost half of its market share to private players, and it lacked the financial resources to compete.
The company depended largely on European Union (EU) exports for its survival. CSC had a US$15 million revolving payment facility with the bloc. The Zimbabwe Mail also reported and agreed that the company had an annual allocation of 9100 tonnes and used to fork over approximately US$45 million per annum from the EU export quota. The facility was discontinued in 2001 after the EU suspended imports following an outbreak of foot-and-mouth disease.
Analyst Tafara Mtutu said; “With the refurbishment of equipment, payment of all debts, and a revolving fund, there are high hopes that the Zimbabwean beef giant will create employment, open up related investments, and that it will have a positive impact on the country’s trade and the economy.”
Under the new set up, the company has been renamed to CSC-Boustead Beef Zimbabwe and the investor will take over and manage CSC ranches in Maphandeni, Umguza, Mushandike, Chivumbuni, Darwendale, Dubane and Willsgrove for an initial period of 25 years.
The reopening of the Bulawayo-based Boustead Beef Cold Storage Company is a significant development in the restructuring of the agriculture industry since President Emerson Mnangagwa’s announcement of the Agriculture and Food Systems Transformation Strategy in 2020-ebusinessweekly
