Online Reporter
Martin Kadzere
CBZ Bank has invested more than $145 million into the tobacco sector during the 2024/25 season, demonstrating the bank’s significant commitment to local agricultural support.
The bank’s efforts are aimed at boosting domestic participation in the tobacco value chain and reducing reliance on foreign funding, a key objective of the Government’s Tobacco Value Chain Transformation Plan.
CBZ executive for corporate banking Mr Phibeon Mutibura said, in a presentation delivered on his behalf at the 2025 Tobacco Conference hosted by Zimpapers, that the substantial investments include $116,2 million allocated directly to tobacco merchants for green leaf purchases, while $24,8 million was provided as input finance to smallholder growers.
CBZ’s subsidiary, Agroyield, independently contributed $9 million to support 26 commercial and medium-scale farmers who planted 2 678 hectares. These investments have positioned CBZ to directly finance approximately 24 percent of the total traded tobacco volume in 2025.
Mr Mutibura, however, expressed concern over the continued high level of foreign financing in the sector. He highlighted that an alarming 88 percent of the revenue generated from tobacco is currently being repatriated, primarily due to the predominant role of foreign sources in funding tobacco production.
“At CBZ, we fully recognise the importance of the tobacco value chain, from small-scale growers to large commercial operators,” said Mr Mutibura.
“As early as 2000, CBZ held around 49 percent of its loan book in agriculture, dedicating $3 billion to the sector, which is one of the highest allocations among Zimbabwean banks.
“In 2024, local banks provided approximately $632,4 million, being 67 percent of the total funding for tobacco production and purchasing. It is (however), concerning that approximately 87-88 percent of the revenue generated is being repatriated, primarily because the majority of the financing for tobacco production comes from foreign sources.”
Despite being touted as the country’s second-largest single foreign currency earner after gold, tobacco exports are failing to deliver their full potential due to the contract farming financing model that sees a significant portion of export revenue stay offshore.
Official estimates show that Zimbabwe only retains around 12 percent of the net earnings from the exports due to reliance on offshore funding to finance production.
The bulk of export revenue goes towards repaying the loans, leaving limited financial benefit for the economy.
The conference, which was sponsored by CBZ Holdings, Tobacco Industry and Marketing Board, OneMoney, POSB, Hunyani, Clover Leaf Motors, TSL, Pacific Cigarette Company, and Pureigh Investments, among others, primarily focused on beneficiation, buoyed by the country’s record achievement of 351 million kg of tobacco.
Contributing to the deliberations, agricultural economist at the University of Zimbabwe, Dr Kingstone Mujeyi, emphasised the immense potential of the African Continental Free Trade Area (AfCFTA) as a “golden opportunity” to significantly expand Zimbabwe’s tobacco industry through value addition.
Dr Mujeyi highlighted that by exporting value-added products such as cigarettes, pipe tobacco, blended products and smokeless tobacco, Zimbabwe could tap into rising demand in markets like the Democratic Republic of Congo (DRC) and North Africa.
The strategic shift, he noted, would not only enhance competitiveness through reduced tariffs and trade barriers but also benefit from ongoing ease of doing business reforms. Dr Mujeyi projected that with full value addition, Zimbabwe could potentially earn “tens of billions of dollars.”
Small and Medium Enterprises (SMEs) are also seen as pivotal to realising this vision. He underscored their role in driving innovation across curing systems, processing, packaging and logistics. To further empower the SMEs, Dr Mujeyi urged the Tobacco Industry and Marketing Board (TIMB) to increase the promotion of localised beneficiation hubs and ensure SMEs have access to affordable resources like finance, coal, and electricity.
Furthermore, Dr Mujeyi stressed the importance of youth and women’s participation and empowerment. With over 70 percent of tobacco now produced by small-scale farmers, largely women and youth, formalising their involvement through initiatives like the Government and TIMB’s biometric grower registration systems was critical.
He suggested supporting women and youth-led enterprises through contract farming, training in business development services (BDS) and financial literacy, and facilitating access to finance.
Dr Mujeyi said strong political will had been demonstrated by the Government through its “Leaving no one and no place behind” mantra, the “Zimbabwe is open for business” drive, and its “engagement and re-engagement” efforts to unlock investments.
He reiterated that developing robust local financing mechanisms remains key to reducing the country’s reliance on external funding, thereby securing greater domestic benefit from its valuable tobacco resources.
