Exactly a month after the Reserve Bank of Zimbabwe (RBZ) announced intentions to localise tobacco financing in its mid-term monetary policy statement, the directive to operationalise that announcement has not been issued triggering anxious moments for farmers.
And with planting of irrigated tobacco entering week two, farmers were expecting the actualisation of RBZ's intentions to help lower production costs and allow the country to break another record in terms of hectarage.
The RBZ had not responded to our questions on the matter at the time of going to press with a check on their website showing that no directive to that effect had been issued.
The largest area planted under tobacco was in 2019 with 146 000 hectares.
Zimbabwe Tobacco Growers Association (ZTGA) chairman Mr George Seremwe said it was potentially possible for the record to be broken but that hinged on reduced cost of production.
"It is very possible for the country to surpass the all-time high hectarage as there are no alternative crops that can reward farmers better than tobacco. The high cost of production, which needs to be significantly lowered for increased production, productivity and profitability has, however, remained the elephant in the room," ZTGA chair said.
Mr Seremwe observed that farmers expected the recently announced localisation of tobacco funding by the RBZ to reduce the cost of production and increase profitability of the crop. He expressed optimism that the localisation and sourcing of funds on the local market would significantly lower production costs and also allow the entry of other players into the industry for competition.
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Last month, RBZ governor Dr John Mangudya announced Government's plans to localise tobacco financing starting in the 2023/24 season via the removal of restrictions on the use of locally sourced funds to support tobacco production.
In his mid-term monetary policy statement, Dr Mangudya hinted that locally sourced funds could now be used in funding tobacco production.
"In terms of Section 4 of the Exchange Control (Tobacco Finance) Order, Statutory Instrument 61 of 2004, tobacco merchants are required to source offshore financing to produce and buyback green leaf tobacco. Tobacco merchants who fail to secure offshore financing are required to apply to the RBZ for authority to raise funds on the local market. With immediate effect, there will be no restrictions on the use of locally sourced funds to support the production of tobacco in the country," said Dr Mangudya.
He said the Exchange Control (Tobacco Finance) Order, Statutory Instrument 61 of 2004 would be amended to take account of this change, thanks to the new development.
Meanwhile, statistics released by the rebranded Kutsaga have since confirmed that farmers had bought 947 kilogrammes of tobacco seed with potential to cover 189 417 hectares by September 6, which corroborates projections of an all-time biggest hectarage this time around.
The Tobacco Industry and Marketing Board (TIMB) has also disclosed that there was a 16 percent increase in the seed bed sown area from 85 hectares by end of August last year versus this year's 98 hectares.
