Tag: Zimbabwe

Filling the Gaps

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As it seeks to reduce its reliance on tobacco, Zimbabwe is investing in cannabis research.
By Daisy Jeremani
In a bid to bridge the knowledge gap in Zimbabwe’s burgeoning cannabis industry, the Zimbabwe Industrial Hemp Trust (ZIHT) has identified 63 medical doctors for training to equip them with skills to conduct medical and clinical research on cannabis.
They are in a flexible 12-month online program that was designed in Australia by the International College of Cannabinoid Medicine. Students can study at their own pace but are expected to finish the course within 12 months.
Nesisa Ncube, a junior resident medical officer at Mpilo Central Hospital in Bulawayo, Zimbabwe’s second biggest city, views her selection to participate in the course as an honor and an opportunity to learn more about the new medicinal cannabis sector.
She hailed the training as “insightful” as it delves, among other modules, into pharmacokinetics of medicinal cannabis and also what to consider when planning to prescribe medicinal cannabis to a patient.
“It has been interesting to learn how some conditions which don’t have clear and effective treatments are now being treated with medicinal cannabis, and there have been some good outcomes,” she said in an interview with Tobacco Reporter.
The southern African nation, which is also the continent’s biggest tobacco producer, has been working to diversify that sector amid the intensifying campaign against the golden leaf over environmental and health concerns. Zimbabwe identified cannabis production as among the possible pathways to diversification.
In April 2018, it became Africa’s second country (after Lesotho) to issue licenses for production of cannabis for medicinal and scientific use. Thereafter, the government created a licensing and enforcement desk to administer the relevant statutory instrument on behalf of the health ministry. The desk’s mandate covers applications for licenses of sites, applications for renewal, variation or amendment of licenses for sites or persons, the production, handling, import and exportation of controlled substances and all compliance issues relating to controlled substances.
Locally produced cannabis is largely for export purposes only, with domestic use restricted to research and development purposes.
In its 2022 annual report, The Medicines Control Authority of Zimbabwe (MCAZ) says that it has issued 59 licenses for production of cannabis for medicinal and scientific use. Fifty-eight licenses were active with 56 of them being for cultivation and production and two for cultivation and research.
Last year,, the MCAZ received two applications for production of hemp-based cannabidiol products as complementary medicines. It issued one of the applicants with a pharmaceutical manufacturer’s license restricted to complementary medicines manufacture.
Among the major licensees is Swiss Bioceuticals, which launched a $27 million medicinal cannabis farm just outside Harare in May 2022.
ZIHT CEO Zorodzai Maroveke said most of the ZIHT’s activities are to fill gaps and needs in the hemp industry, and one of the gaps it has identified is the lack of knowledge among local medical health professionals. It is against this background that the ZIHT has facilitated the year-long training program.
“It is the study of a very huge biological system called the endocannabinoid system,” she said.
The local medicinal cannabis industry has not developed as fast as expected since the first license was issued five years ago due to what Maroveke describes as tight compliance requirements by the regulator and failure to comply by most players. The enormity of resources required for entry is the biggest hurdle, she observed.
ZIHT is worried over these challenges, which are frustrating more effective participation into this specialized area by local investors.
“The industry remains capital-intensive, the market dynamics present a market access challenge, [and] lack of localized expertise have all affected the participation of local investors,” said Maroveke.
Although ZIHT’s primary area of interest is industrial hemp, she said, their support for medicinal cannabis is because there was no active representation of the sector by its major stakeholders.
Ncube is optimistic that the training she is undergoing will advance her career as it covers an area that is not yet part of the curriculum at local medical schools. The increase in the number of health professionals who are conversant with this novel treatment system, she observed, will add diversity to the medical fraternity.
“The training will help advance my career by educating me on the mechanisms of action and prescribing considerations for medicinal cannabis, which is not really a subject that was covered in med school, and this will benefit the medicinal cannabis sector because this increases the number of health professionals who have knowledge on the subject, which enables expansion of the sector into other countries like mine,” Ncube said.
“I see expansion of the industry with distribution centers all over the world with safe prescription and monitoring of patients by properly trained health care professionals on the subject.”
Zimbabwe is battling an increase in psychiatric cases due to abuse of various illicit substances, cannabis included. Up to 80 percent of all admissions to Ingutsheni Psychiatric Hospital in Bulawayo are due to drug and substance abuse, including marijuana, officials say.
Percy Mukwacha, who is also training in psychiatry at the University of Zimbabwe and is also undergoing training under the ZIHT scheme, said he was mostly impressed by the potential of cannabinoid not only to treat a number of illnesses but to also ease the burden on local healthcare.
“In mental health, we get a lot of morbidity from cannabis use. That’s what interested me to join this training where cannabis can have positive effects on the society,” he told Tobacco Reporter.
“I guess an understanding of this ubiquitous substance with problematic consequences has to be helpful in my career.”
Treatments derived from cannabis, said Admire Machongwe, a medical doctor in private practice in Harare, have potential to revolutionize patient care in the country.
“We were notified of the scholarship but were already intrigued by the way cannabinoid medicines were being used to treat chronic pain and other ailments,” he said.
“It [training] will be quite beneficial,” he added. “We expect cannabinoid medicines to be licensed in Zimbabwe in the near future. Treatment of otherwise difficult-to-treat conditions like chronic pain and depression might be achievable.”
December 1, 2023
Leaf Exports Poised to Hit $1.6 Billion

Photo: Taco Tuinstra
Zimbabwe expects to earn at least $1.6 billion from tobacco exports this season, reports The Herald. Since the start of the marketing season, the country has exported more than 210 million kg of tobacco worth more than $1 billion, more than two thirds of the crop.
Zimbabwe’s tobacco growers delivered nearly 300 million kg this year, which currently being processed, sorted and exported, a process that takes up to a full year.
The Far East is the largest destination for Zimbabwean leaf in terms of value. Other prominent destinations include the European Union and the Middle East.
As part of the government’s Tobacco Value Chain Transformation Plan, Zimbabwe aims to build a $5 billion tobacco industry by 2025, a target that looks increasingly realistic in light of the recent export figures.
“The vision for a $5 billion tobacco industry is quite achievable,” said Zimbabwe Farmers Union Secretary General Paul Zakariya. “As we inch towards that vision, we need to significantly increase local funding for tobacco production. This will allow for local value addition and import substitution of finished products. That is where real value is.”

November 24, 2023
Farmers Demand Full U.S. Dollar Retention

Photo: Taco Tuinstra
Zimbabwean tobacco farmers have asked the government to allow them to retain 100 percent of their earnings in U.S. dollars in the upcoming selling season, reports The Herald.
The request comes after the Reserve Bank of Zimbabwe (RBZ) announced tobacco growers will be paid only 75 percent of their sale proceeds in foreign currency in the 2023-2024 season. The remaining 25 percent is to be settled in local currency at the prevailing interbank market rate.
This ratio is down from the 85/15 percent split that applied in the 2022-2023 season.
Zimbabwe Tobacco Growers Association (ZTGA) Chairman George Seremwe said tobacco farmers need to retain all of their earnings in foreign currency because their production cost, too, are foreign-currency based. Under the prevailing split, farmers struggle to turn a profit, according to Seremwe.
Zimbabwe Tobacco Association CEO Rodney Ambrose concurred. “Tobacco production costs are already 90 to 100 percent dollarized. Last season’s 85 percent retention assisted in improving growers’ viability, more so given the flattening out of farmers tobacco prices and increased costs of production,” he said.
“Contractors have lent out almost 100 percent of their loans in foreign currency to farmers, anything less than the current 85 percent retention will negatively impact on growers’ viability.”
“It’s unfortunate that 75/25 split portion reverses the gains made, we hope that the policy will change in February 2024,” said Tobacco Farmers Union Trust President Victor Mariranyika. “This previous season’s 85 percent retention was not enough for farmers, so we were looking forward to 100 percent foreign currency retention in the 2024 marketing season,” he said.
Under the Tobacco Value Chain Transformation Plan, Zimbabwe aims to sustainably produce 300 million kilograms of flue-cured tobacco by 2025. In 2023, the country’s farmers produced 296 million kg and earned $897 million.
A Nov. 10 report by the Tobacco Industry and Marketing Board (TIMB) shows the number registered tobacco growers declined by a quarter for the 2023-2024 season.
November 22, 2023
Zimbabwe Leaf Exports Top $1 Billion

Image: Tobacco Reporter
Tobacco export earnings in Zimbabwe have increased to over $1 billion as of Nov. 10, and dryland farmers have continued to plant, according to The Herald.
According to the Tobacco Industry and Marketing Board (TIMB) weekly report data from Nov. 10, there was a 41 percent increase in the value of exported tobacco from $753.14 million from January to Nov. 10, 2022, to $1.06 billion in the same period of 2023.
This year, there was a 28 percent increase in volume terms from 157.95 million kg to 202.68 million kg. The average price increased 10 percent to $5.25 per kilogram.
The Far East market accounts for 64 percent of earnings, followed by the European Union at 14 percent and Africa at 12 percent. The Far East market had the highest average price at $7.19, followed by the EU at $4.37 and Africa at $3.43.
According to the TIMB report, there was a 3 percent decrease in total area under tobacco to 27,615 hectares this year.
Due to the El Nino weather forecast, there has been a 10 percent increase in irrigated area to 17,395 hectares. The area planted under dry land tobacco decreased 20 percent to 10,220 hectares.
The 2023/2024 season shows a 25 percent decrease in growers registered to 107,415. Of the registered growers, 92 percent are contracted.
“We hope mother nature will hear us this coming two weeks because we might lose some of the planted tobacco if it does not rain,” said George Seremwe, chairman of the Zimbabwe Tobacco Growers Association.
“We encourage farmers to do their best to mitigate negative effects of El Nino, and those who have not yet started planting must continue attending to nurseries and prepare land,” said Victor Mariranyika, president of the Tobacco Farmers Union Trust.
Zimbabwe aims to increase the value of its tobacco business to $5 billion by 2025 as part of the government’s Tobacco Value Chain Transformation Plan.
November 16, 2023
Zimbabwean Farmers Bemoan Power Cuts

Photo: Taco Tuinstra
Power cuts in Zimbabwe are impacting irrigation and increasing tobacco farmers’ production costs, reports The Herald, citing Zimbabwe Tobacco Association (ZTA) CEO Rodney Ambrose.
“Power outages from about 0500 hours in the morning to as late as 2200 hours are a major concern in most growing areas at the moment,” Ambrose was quoted a saying. “Growers are struggling to complete their irrigation cycles and are relying on diesel powered generators, incurring huge costs.”
Ambrose said the crop quality, yield and grower viability would likely be compromised as the option of running generators for irrigation is not sustainable. With curing of the irrigated crop scheduled to start in early December power demand will increase further.
“We are engaging with the power utility to identify clusters where power supply can be prioritized just like they did for the wheat program. However, if power deficits persist nationally, the cluster solution may not entirely resolve the issue. The next option is to plead with the government to provide subsidized diesel or allow duty free imports of fuel primarily for powering generators,” said Ambrose.
Ambrose believes the long-term solution is for farmers to transition to solar power although this has a costly outlay that requires growers to have access to long term financing.
It will also require the government to permit duty-free and tax-free imports of solar equipment for farming activities, he added.
Tobacco farmers have planted 22,298 hectares this season, including 16,962 hectares of irrigated tobacco, according to the Tobacco Industry and Marketing Board.
The report said 105,805 growers had been registered so far compared to 133,724 registered growers during the same period last year, marking a 26 percent decline.
November 8, 2023
Zimbabwe Increases Tobacco Planted Area

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Zimbabwean tobacco growers have planted 21 percent more hectares for the upcoming crop season than they did last year, according to the Tobacco Industry and Marketing Board, reports The Herald.
The total planted area increased to 19,256 ha from 15,868 ha in 2022. Irrigated area increased 12 percent to 16,962 ha, and dryland increased 232 percent to 2,294 ha.
Farmers increased dryland area cultivation as a precaution for expected harsh weather conditions forecast for the second part of the rainfall season in 2024.
Tobacco export value increased to $934.17 million in the 2022–2023 selling season, up from $717.178 million during the previous year. Tobacco exports increased 23 percent in volume to 180.54 million kg.
The average price increased by 6 percent to $5.17 per kilogram.
The number of registered growers decreased by 24 percent. To date, 102,098 growers are listed for the 2023–2024 season compared to 133,724 last year. Of the registered growers, 92 percent are contract growers.
“That is a very much appreciated reduction, which will impact on tobacco cost of production as irrigated tobacco uses raw water,” said Zimbabwe Tobacco Growers Association chairman George Seremwe. “We also encourage other stakeholders like the Zimbabwe Electricity Supply Authority to follow suit and reduce electricity charges as cost of irrigation is affected by power bills. The same reduction must be stretched to other inputs like chemicals, fertilizers, and this will result in more tobacco being produced profitably.”
Zimbabwe Tobacco Association CEO Rodney Ambrose stated that the change was welcome if the water price reduction was spread to other crops apart from maize. “We are seeking clarity on a number of areas in the statement, such as the mention of only irrigated maize as being the beneficiary. What about other crops?” he said.
Anxious Masuka, Lands, Agriculture, Fisheries, Water and Rural Development minister, said that the move to reduce water charges by 31 percent is meant to incentivize farmers to commit more hectarage to irrigation for the 2023–2024 summer season.
November 1, 2023
Coal to Tackle Cost and Deforestation in Zim

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Zimbabwe’s Tobacco Industry & Marketing Board (TIMB), Kutsaga research station and Hwange Colliery Co. have jointly developed a special coal facility to help reduce tobacco farmers’ production costs and address deforestation concerns, reports the Zimbabwe Independent.
The facility will benefit TIMB-registered growers with active grower numbers. TIMB said negotiations were underway with transporters to ensure that the coal is delivered to farmers on time and at affordable rates.
“The high cost of tobacco production is one of the main challenges bedeviling tobacco farmers in Zimbabwe,” TIMB spokesperson Chelesani Tsarwe told NewsDay Farming, referring to the prices of production inputs, energy and other farming necessities.
The coal facility, she said, will help tobacco farmers realize significant savings in the curing process.
Zimbabwe Tobacco Growers Association president George Seremwe welcomed the arrangement. “The outcry has been us tobacco farmers through our associations, lobbying and advocating reduction on the cost of production and they started sort of goal rolling by engaging different suppliers in this case, Hwange Colliery Co. to come up with cheaper modalities, better way of cushioning the farmer in the form of reduction on the cost of production,” he said. “We are very happy and pleased to hear such an initiative happening.”
More than 70 percent of Zimbabwe’s tobacco crop is cured using unsustainable wood, with deforestation increasing, according to Zimbabwe Tobacco Association CEO Rodney Ambrose.
“While the industry embarks on reforestation programs, more efficient curing systems and alternate sustainable curing fuels, stop-gap measures need to be put in place in order to ensure that we maintain our production levels and protect the livelihoods of thousands of farmers,” he said.
“One of the measures is coal, and to reduce the cost of purchasing and delivering the product to farmers.”
Zimbabwe achieved a record crop of 296 million kg of tobacco for the 2022-2023 season, earning nearly $1 billion from leaf sales.
This year’s sales volumes put Zimbabwe on track to achieve its target of 300 million kg by 2025, as formulated in the Tobacco Value Chain Transformation Plan, ahead of schedule.
October 19, 2023
Pacific Disputes ‘Shocking’ Tax Bill

Pacific Cigarette Co. co-founder and chairman, Adam Molai, during a virtual press conference on Oct. 11
Pacific Cigarette Co. (PCC) of Zimbabwe has rejected a US$33 million tax bill (comprising separate assessments of US$19 million plus ZWD79 billion) and hopes an ongoing discussion with the national revenue collector will lead to an amicable settlement of the impasse.
PCC went into voluntary business rescue soon after the Zimbabwe Revenue Authority (ZIMRA) in June handed it the assessment covering the periods 2018, 2019 and 2020.
Adam Molai, co-founder and chairman of the Harare-based firm, told journalists during a virtual press conference on Oct. 11 that the bill was too high for any local company to be liable for over three years.
“I don’t believe there is any company in Zimbabwe which over a period of three years can rack up a tax bill of over $20 million so that’s why we are disputing it,” he said.
“This period that is being talked about is the period 2018, 2019 and 2020, but from the year we started operating until 2020 we have been audited every single year by ZIMRA, so it shows that we are compliant.”
PCC”s production has, since 2005, been based on toll manufacturing, which meant it manufactured cigarettes for other firms.
However, authorities have changed the way they calculate tax for toll manufacturers, which left PCC with obligations amounting to $33 million.
The bill, Molai said, is “shocking” in terms of its magnitude.
“Effectively what this assessment means was that if you look at a company [which for example] sells a product at $100, it has a cost of sales of $70 which is raw materials,” he said.
“ZIMRA came in and said the $70 of raw materials is also income and because ‘we are deeming it income, we are going to levy VAT on it and after levying VAT because it is 2018, 2019 and 2020 we are also going to levy interest and then we are also going to levy a penalty for each of the years,’ so effectively what that would mean is Pacific produces their cigarettes at a price of zero. If our cost of sales is also deemed income it means our cost of production is zero, our raw materials are for free and that is what we are disputing.”
PCC says it pays an average of $3 million in taxes yearly and has invested up to $250million since it started operating in 2002 as a threshing company.
ZIMRA has 90 days within which to respond to an objection but before that period had elapsed, it, Molai claimed, issued a garnishee order against PCC. The tax collector also wrote to the company’s clients asking them to pay all they owed PCC to ZIMRA instead.
“That closes all our income streams and that is when we took the decision to say the most responsible decision is to place the business under business rescue,” said Molai.
Responding to a question from Tobacco Reporter, Molai expressed confidence that ZIMRA will hand down a favorable decision but if it turns out negative, the company will appeal to the courts.
“The day that the contingent liability is removed off our balance sheet, we will have an extremely strong balance sheet,” he noted.
“The good thing about our company that is different from other companies that go into business rescue is we don’t have multiple challenges to address, we only have one single challenge to address which is this dispute.”–Daisy Jeremani
October 12, 2023
Zimbabwe Shifts Focus to Value Addition

Photo: Screaghin
Having nearly achieved its targeted leaf volumes, Zimbabwe is shifting its emphasis to promoting exports of value added tobacco products, reports The Herald.
The Tobacco Value Chain Transformation Plan (TVCTP) aims to capture more value from the tobacco industry by producing larger crops and moving beyond leaf cultivation. Among other things, it calls on farmers to produce a tobacco crop of 300 million kg by 2025.
In the most recent market season, Zimbabwe sold more than 290 million kg of tobacco. The seedbed for the country’s 2023-2024 is 15.5 percent larger than in the previous season, making it likely that Zimbabwe will achieve its target volume ahead of schedule.
“There has been an increase in volume as a result of post-harvest loss reduction and yield increase,” said Information, Publicity and Broadcasting Services Minister Jenfan Muswere following an Oct. 10 cabinet meeting. “During the 2022-2023 season a record 296.1 million kilograms of tobacco, worth $896 million was produced.
Satisfied with the progress made in increasing volumes, the sector is now turning its attention to value addition.
“There are opportunities to increase the level of value addition and beneficiation of tobacco into cut rag and cigarette production from 2 percent of tobacco produced to 30 percent,” said Muswere. “The construction of a new cigarette manufacturing plant and cut rag processing factories is underway and this will result in an increase in processing capacity by 50 percent in the first half of 2024.”
October 11, 2023
Zimbabwe Tobacco Export Earnings Up

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Zimbabwe has recorded a 26 percent increase in export earnings from tobacco products, according to The Herald.
Export earnings were USD603 million in the January 2023 to August 2023 period, up from USD477 million in the same 2022 period, following the operationalization of the Tobacco Value Chain Transformation Plan (TVCT).
Zimbabwe exports partly or whole stemmed/stripped tobacco or not stemmed/stripped tobacco, tobacco refuse, cigars, cheroots and cigarillos containing tobacco, cigarettes and manufactured tobacco.
Volume increased 13 percent, and the average price increased 12 percent.
Of the exported product, 71 percent was partly or wholly stemmed/stripped tobacco, and 19 percent was tobacco refuse, the same trend from 2022.
“There has been a significant increase in shipments to the Far East as shipping constraints have eased,” said Rodney Ambrose, CEO of the Zimbabwe Tobacco Association. “Also, a higher value crop has been exported to select destinations. Unfortunately, the same growth cannot be said of growers’ earnings. The future of the tobacco sector remains positive, provided we can address issues around growers’ viability and sustainability.”
“Credit must be given to farmers who continue to grow the crop even if they are breaking even or making a loss with the hope that one day, they will make a profit,” said George Seremwe, chairman of the Zimbabwe Tobacco Growers Association. “Contractors also should be thanked for rendering support to farmers. However, the Tobacco Industry and Marketing Board (TIMB) must work on reducing or eliminating the participation and licensing of surrogates (middlemen) who are putting huge markups on their services to the detriment of farmers.”
Farmer profitability can only be enhanced if all stakeholders work to reduce production cost with the TIMB enforcing contract pricing and monitoring the delivery of adequate inputs to farmers on time, according to Seremwe.
The government and tobacco stakeholders came up with the TVCT with the aim of creating a USD5 billion industry by 2023.
Export of tobacco products has been on an upward trend, with earnings of USD795 million in 2020, USD837 million in 2021 and USD998 million last year. By the end of this year, earnings are expected to exceed USD1 billion.
October 10, 2023