Tobacco bales

Oliver Kazunga Senior Business Reporter
ZIMBABWE is losing at least 60 percent real value through raw tobacco exports, economic experts said yesterday amid heightened calls for the speedy setting up of local processing firms.

While statistics from the Tobacco Industry and Marketing Board (TIMB) show that $276 million has been realised from the sale of 49.4 million kilogrammes of flue-cured tobacco since January, analysts say the country has nothing to celebrate in terms of real value.

During the same period last year only $141.2 million was realised from 38.8 million kg of the golden leaf exported around the world. In 2014, Zimbabwe closed the year with over $1 billion tobacco export earnings.

Economic analysts say setting up a tobacco processing plant to promote value addition of the crop and improve the crop’s export earnings is long overdue.

Agricultural economist and farmer, Thomas Nherera said: “We’re selling (exporting) our tobacco as a raw material not as a finished product. Some of the crop is sold either as real leaf or semi-processed and due to lack of value addition, Zimbabwe is currently getting 60 percent below the real value of processed tobacco. The person who’s processing the tobacco is the one getting the greatest benefits.”

Nherera said the country needs to invest in tobacco processing plants quickly in order to realise full value of the crop.

“We need to value add the crop so that when we sell, we get full value. But like in every case, we need to have capital for procurement of plant machinery,” he said.

Zimbabwe exports flue-cured tobacco to more than 50 countries with China being the major consumer of the golden leaf.

Last year Zimbabwe and China announced plans to establish a multi-million dollar tobacco processing plant to promote value addition of the crop in line with the government’s five-year blueprint, the Zimbabwe Agenda for Sustainable Socio-economic Transformation (Zim-Asset).

Another economic commentator, Wendy Mpofu said it was imperative for the country to seek investors for tobacco processing in line with the objectives of the Zim-Asset blue-print.

“The tobacco industry has since the adoption of a multicurrency regime proved to be one of the major economic mainstays. Against this background, there is need for the country to look at possible ways of attracting potential investors in the tobacco processing sector so that a processing plant is set up in the country. If tobacco is processed locally, we stand to benefit much more from the crop through value addition,” she said.

“While it might be difficult to ascertain the actual value of revenue Zimbabwe is losing as a result of exporting raw tobacco, the country is losing about 60 percent of real value of the processed crop.”

Peter Mhaka, an economic commentator echoed similar sentiments adding that there was no way Zimbabwe could realise more value from its resources without value addition and beneficiation.

“We need to value add and beneficiate our resources before exporting otherwise there’s no way we could realise more without value addition and beneficiation,” he said.

Value addition and beneficiation is at the centre of the government’s economic turnaround efforts.

The approach is envisaged to enhance industrial growth and increase earnings for the country while broadening employment opportunities.