Tobacco merchants have mobilised more than $500 million towards this year’s tobacco marketing season, Reserve Bank of Zimbabwe (RBZ) has said.
BY FIDELITY MHLANGA
RBZ governor, John Mangudya told NewsDay recently that apart from a few selected merchants, who will buy the green leaf using real time gross settlement (RTGS) balances, a huge chunk of big tobacco merchants will buy using foreign currency. “The bulk of tobacco is funded by people with foreign currency; Tianze and BAT [British American Tobacco] are the biggest. We are expecting about $200 million kg of tobacco and if we multiply that by an average of $2,50. We are expecting about $500 million from merchants,” he said.
In his 2018 monetary policy statement, Mangudya said deserving merchants would be allowed to buy tobacco using RTGS balances and he, however, maintained that the amount of RTGS money to be used was very little.
“It will still come. It’s a small percentage that qualify for that without reducing the liquidity situation in the country. It’s just a token, which we give because there are indigenous and small scale merchants who cannot afford to bring money (forex) here.”
The tobacco marketing season is anticipated to commence next month amid expectation that the purchasing of the green leaf will ease forex shortages by way of lubricating the country’s nostro accounts essential for the importation of cash, fuel, raw materials among other commodities.
Statistics from Tobacco Industry Marketing Board show that there is a 44% jump of farmers, who registered to grow tobacco from 82 305 last year to 118 142 this season. There are 33 605 new farmers up from 14 952 last season.
Tobacco is one of the country’s biggest foreign currency earners, contributing at least 10% to the gross domestic product.
Most of the farmers, however, have largely remained poor despite the huge contribution due to a host of reasons such as unfair pricing, lack of government policy support systems and mistrust between buyer and seller. In the monetary policy statement, Mangudya said he was increasing the tobacco finance facility to $70 million this year from the $28 million disbursed in 2017 to grow the sector.