Oliver Kazunga, Senior Business Reporter
THE Tobacco Industry and Marketing Board and the Zimbabwe Stock Exchange (ZSE), together with its subsidiary the Victoria Falls Stock Exchange, have signed a deal aimed at enhancing tobacco production by small-scale farmers across the country.
The deal comes against a backdrop of funding and marketing challenges faced by small-scale tobacco growers and local merchants.
“The TIMB, ZSE and the Victoria Falls Stock Exchange Limited (VFEX) are pleased to announce the signing of a Memorandum of Understanding, which forms a basis for cooperation in the fundraising for tobacco farmers, and fundraising for local tobacco merchants,” reads part of the joint statement.
The deal is also critical as it covers compilation and distribution of tobacco production and marketing data as well as the establishment of a tobacco derivatives market.
“The full implementation of this MoU is expected to result in increased productivity and smoother cash flows for small-scale farmers and improved capacity for local tobacco merchants,” reads the statement.
Tobacco is one of Zimbabwe’s major foreign currency earners and has since the liberalisation of the economy in February 2009, supported the country with liquidity.
Zimbabwe exports its flue-cured tobacco all over the world to over 60 countries among them China, the United Arab
Emirates, Indonesia, South Africa, Belgium, United Kingdom, Australia, Zambia, Malawi, Botswana, Taiwan and Turkey, among others.
Last year, Zimbabwe earned over US$1 billion in foreign currency receipts through the golden leaf. Last week, Cabinet approved the Tobacco Value Chain Transformation Plan aimed at transforming the tobacco value chain into a US$5 billion industry by 2025.
It is hoped that this would be attained through localisation of tobacco financing, increased production and productivity, value addition and beneficiation, and exports of cigarettes.
Official data already shows that 205,9 million kilogrammes of tobacco worth US$574,8 million had been delivered for auction as at August 23, surpassing this year’s projection of 200 million kg by 2,95 percent.
The 2021 tobacco marketing season officially closed on July 14 and in 2020 the country produced a total of 184 million kg of the golden leaf.
Among others, the strategic objectives of the transformation plan are; to localise the funding of tobacco to complement external funders; raise tobacco production and productivity from 262 million kg to 300 million kg by 2025 and to diversify and increase the production of alternative crops such as medicinal cannabis and increase their contribution to the farmers’ incomes to 25 percent by 2025. — @okazunga