Zimbabwe is set to witness a significant boost in its tobacco industry and value chain transformation with the construction of a new cigarette manufacturing plant. The plant, expected to increase current manufacturing capacity by 50 percent, aligns with the government's strategy to enhance the tobacco value chain.
According to Information, Publicity, and Broadcasting Services Minister Dr. Jenfan Muswere, the Cabinet has adopted an update report on the tobacco value chain transformation strategy. The report highlights the growth in the value of local tobacco purchases, which increased from US$650 million in 2022 to US$897 million in 2023. Additionally, intentions for local financing of tobacco purchases for the 2024 marketing season amount to US$81 million.
The transformation plan, launched in 2021, aims to increase tobacco production to 300 million kilograms annually and raise value addition and beneficiation from 2 percent to 30 percent, ultimately building a US$5 billion industry by 2025.
Currently, Zimbabwe has seven cigarette manufacturers with a combined production capacity of around 5 billion cigarette sticks per year. The construction of an additional cigarette manufacturing plant, set to increase capacity by 50 percent, is underway and expected to be operational in the first half of 2024.
Tobacco, which contributes substantially to Zimbabwe's economic development, is primarily exported to over 60 countries. The majority of tobacco production (52 percent) is carried out by beneficiaries of land reform, generating 54 percent of the annual value. The average gross earnings for tobacco farmers exceed US$7,000 annually per grower.
The success of land reform is evident in the significant increase in the number of tobacco growers, which has grown 17-fold since its inception. Currently, over 85 percent of tobacco is grown by smallholder farmers, with the rest cultivated on communal land farms.
The average yield of tobacco has increased due to farmers' experience and improved support from merchants, as well as a conducive policy environment and government advisory role. The average price paid to farmers has also risen by 80 percent from 2000 to 2023, reflecting the production of better-quality tobacco.
Despite this year's projected production of around 265 million kilograms, below the target of 300 million kilograms, the industry and government remain committed to achieving the national target by 2025. Tobacco stands as Zimbabwe's largest non-mineral export, playing a vital role in the country's economic growth.
