Time to transform tobacco value chain long overdue – experts

THE country’s 2025 goal of transforming the tobacco value chain into a US$5 billion industry remains a pipe dream if urgent steps are not taken now to operationalise the tobacco value chain transformation plan.

A local agriculture think-tank who requested anonymity singled out the lethargy in instituting the necessary measures saying that would derail the Government’s noble exercise.

“We have now entered the 2022/23 tobacco season following the start of the planting of
irrigated tobacco on September 1. We have not heard anything from relevant authorities on
what is spelled out in the tobacco value chain transformation plan,” he said.

Tobacco Association of Zimbabwe president Mr George Seremwe also concurred saying
though he was aware of the plan, nothing had materialised to date on the ground.

“We are aware of the plan but nothing has been communicated to us – the farmers. We
have heard about the US$60 million but have no clue as to whether it was released. Instead
of increasing productivity and production, I foresee this season going down if last term’s
issues are not addressed. Some farmers have not been paid for their tobacco deliveries,
with some of the contractors having just disappeared. There is no engagement with the
farmers who do the production,” said Mr Seremwe.

The Government in 2021 came up with the tobacco value chain strategic plan, which
sought to achieve a US$5 billion industry through localisation of tobacco funding,
increased production and productivity and value addition, beneficiation and export of
cigarettes. All of these were meant to contribute to gross domestic product (GDP) growth,
foreign currency generation, employment creation and raising household incomes
pursuant to the Vision 2030 goal of a prosperous and empowered upper middle-income
society.

“Since the strategic plan in August 2021 what has been done to show progress towards the
commitment to the noble goal? Did any of the tenets in the whole spectrum see the light?

Now that we have started planting irrigated tobacco for the 2022/23 season, has any of the
provisions been implemented? These are some of the questions nagging on people’s
minds,” observed Mr Seremwe.

Tobacco specialist with Agritex, Hillary Mugiyo, however, revealed that engagements were
underway between the different stakeholders such as Tobacco Industry and Marketing
Board (TIMB), Agriculture Advisory and Rural Development Services (AARDS) and Tobacco
Research Board (TRB).

“Multiple alternative crops such as chillies, peppers, paprika, industrial hemp, sesame
seed, melons, butternuts, berries, nuts and fruits have been identified for both small and
large-scale farmers. Export markets are being explored with off-taker in Africa (Ghana,
Rwanda), Asia and the Middle East showing interest. Plans are also underway for tobacco
farmers to pilot market-oriented production for identified export crops such as melons,
chillies, and sesame seed in the 2022/2023 season,” said Mugiyo highlighting success to
date.

The tobacco value chain contributes significantly to the GDP and export revenues thereby
aiding national economic growth. Tobacco production supports up to 160 000 households
and accounts for more than 50 percent of agricultural exports and 25 percent of
agriculture GDP.

Among the top tobacco producing countries, Zimbabwe is ranked 4th accounting for about
3, 85 percent of tobacco world production in 2019, after China (39, 06), India (12, 03) and
Brazil (11, 51) with USA completing the last top five slot at 3, 17 percent.

Zimbabwe was ranked 17 in terms of world tobacco and manufactured tobacco substitute
exports for 2020, having exported US$794, 957, 000 worth of tobacco with Poland, United
Arab Emirates, Germany, Italy and Belgium taking the first five slots in decreasing order
(Trade Map). Zimbabwe is ranked number one in African tobacco and manufactured
tobacco substitutes exporting countries.

According to TIMB, Zimbabwe exported tobacco worth US$760, 528, 943 from 186, 807,
937 kg at an average price of US$4, 07 per kg in 2020. The year 2021 saw an increase in
earnings at US$819, 140, 779 from 183, 507, 992kg at an increased average price of US$4,
46 per kg.

According to the World Health Organization (WHO) in a report titled: “Status of Tobacco
Production and Trade in Africa,” Zimbabwe was Africa’s leading tobacco producer
accounting for about 40 ,61 percent of Africa’s tobacco leaf exports in 2018.

Though on pole position in terms of production, Zimbabwe was ranked number nine
within the African continent as regards the exportation of the highly-priced value-added
cigarette accounting for a paltry 1, 45 percent of cigarette exports while South Africa was
on pole position at 30, 02 percent in 2018.

Taking a cue from United Arab Emirates which is an insignificant grower of tobacco, yet
according to Trade Map in 2019 imported raw tobacco worth US$1, 2billion, value-added it
and then exported tobacco and manufactured substitutes worth US$4, 65billion (a 388
percent increase) and realising net earnings of US$3, 45billion.

Zimbabwe can reap significant foreign currency from her leaf tobacco crop through value
addition.
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Over the period 1991-2021 the exported volume of Zimbabwe’s tobacco exports has been
fluctuating from a low value 50 347 tonnes in 2006 to a high of 217 696 tonnes in 1999. In
value terms it hovered from a low of US$149 million in 2006 to a peak of US$934 million in
2017.

Over the period 1991 to 2021, Zimbabwean tobacco exports fetched average prices ranging
from US$2, 03 to US$5, 94 per kg .

In 2010 the European Union (EU) was the largest Zimbabwean tobacco importer followed
by Far East. The Far East overtook EU from 2011 to date as the largest consumer of
Zimbabwe’s tobacco. The EU was the second largest consumer until 2014 and has since
been relegated to number three in 2015 after Africa took the second spotw.-The Herald