Zimbabwe: ZIREBWA: Let''s Add Value to Our Tobacco  

Source from:  Zimbabwe Herald (zw)  04/27/2013

THE increasing number in bales being delivered to the country's tobacco auction floors is a very positive development that augurs well for the country's economy.

After going through a slump due to the economic challenges that the country went through during the past decade, it is very clear that the tobacco industry is on a steady recovery.

So far close to US$100 million has been generated from the sale of 25,2 million kilogrammes of tobacco. The projections are that by the end of the 2013 selling season tobacco worth US$600 million would have been sold.

These figures surpass those realised in 2012 by more than 100 percent. The increase in productivity is ample testimony of the determination of Zimbabwean farmers in defying dire predictions and is a vindication of the land reform programme.

The rise in productivity also suggests that we have it within ourselves to succeed as long as incentives are clear and there is unity purpose among players across the entire value chain. What is also worth noting is the fact that unlike in the past, the rise in tobacco production is a result of a significant rise in the population of farmers.

The number of registered growers in 2013 is said to have grown from 58 801 to over 82 833 with small-scale farmers making up to 80 percent of the figure. If only the rest of our agricultural sector would follow this example, then it is quite possible that our manufacturing sector - which is inextricably linked to the performance of agriculture - would make a quick rebound.

The cost of inputs which are now largely imported would decline while new jobs would be created and our dormant infrastructure is brought to life.

We thus need to draw lessons from the success of the tobacco industry and seek to replicate these across other areas of the economy.

However, what is critical, especially during this period when the Zimbabwe International Trade Fair is in full swing, is to underline that the impressive growth in the tobacco sector and the increase in earnings from the sector could treble if only we value added the raw leaf.

This means the sums we are getting could easily be US$1,8 billion, with thousands of jobs being created in the process.

As such, while we celebrate the increase in tobacco production, it must be tempered by a realisation that Zimbabwe is losing substantial amounts of money by continuing to trade in raw leaf.

The question we need to be asking ourselves is how best we can use the example set by tobacco farmers most of whom were faced by more daunting circumstances than that faced by manufacturers, to create sustainable value chain linkages.

Is it also not possible, for instance, to link the growth of tobacco production to the enhancement of capacity in companies such as Savanna Tobacco, BAT and others. 

Is it also not wise for Government, which played a key role in enabling new farmers to enter the lucrative tobacco industry to come up with credit guarantee schemes that ensure that budding entrepreneurs begin exploring opportunities in the value addition of tobacco.

Still, shouldn't we begin looking at the vast range of fiscal incentives to ensure that tobacco manufacturers expand their capacity and begin exporting value added products?

One feels that the relevance of the Zimbabwe International Trade Fair would be enhanced if we begin incrementally building synergies between our success stories and the manufacturing sector.

We are told that the number of exhibitors this year is higher than that registered last year.

We are, however, not sure about the quality of the new exhibitors. In 2012, it was sad to see that a once dominant player,Cairns, is absent at the fair.

It would not be surprising that a number of other once mighty manufacturing companies with a link to agriculture are also absent at the Fair.

Instead, what we are likely to witness is an increase in traders and agents of manufacturers based elsewhere.
Over time the trade fair will be reduced to a platform for foreign traders and their local agents to market themselves to a local audience.

Meanwhile, the City of Kings will continue to de-industrialise with prospects for recovery dimming with each successive trade fair.

Interestingly, South Africans have the single largest contingent of foreign exhibitors at the trade fair and are also the biggest importers of our tobacco.

This means our neighbours now recognise that Zimbabwe is a market ripe for the picking. As much as we are working hard to revive our economy, we are passing the benefits to our more organised neighbours who are only too ready to repackage our raw leaf, send it back and market it at out international trade fair at treble the prices.

On our part all we do is ensure that we treble the money we give them for each dollar they have invested in us.
To survive we must stop this trend from continuing. As we always painstakingly remind each other, our unemployment levels are too high and poverty remains at unsustainable levels.

The example set by tobacco farmers in succeeding against a myriad of challenges that include lack of capital, erratic electricity supplies, unpredictable weather patterns and costly inputs should motivate us to seek new ways of building stronger partnerships between agriculture, manufacturing and trade.

Different Government departments that extend beyond specific ministries must also begin to sing from the same hymn book and showing an awareness of the endless possibilities we face as a country if we work together.

As usual we welcome your comments on how best we can ensure that Buy Zimbabwe is a successful initiative. Those have time should visit our premier trade showcase, the ZITF. We would be most interested in knowing your key observations. Are we doing the right things or we are regressing?

I wish to remind you once again that at the end of May we meet for the Local Procurement Conference to discuss these and other matters to drive the nation of Zimbabwe forward. Till next week, God bless and always remember to Buy Zimbabwe. Enditem