Online Reporter
Edgar Vhera
Specialist Writer – Agribusiness
The Horticultural Development Council (HDC) has called for an upward review of the foreign currency retention ratio from 70 percent to 100 percent to stimulate the growth of the sector.
This initiative is part of the strategy to expand the sector into a robust US$2 billion market by 2030, underscoring the importance of effective policy frameworks in maximising agribusiness opportunities.
Earlier this year, the Reserve Bank of Zimbabwe reviewed downwards the foreign currency retention level for exporters from 75 percent to 70 percent to guarantee continued stability in the interbank foreign exchange market through augmenting the supply of foreign currency and building the critical foreign currency reserves needed to anchor the ZiG.
The effective surrender portion of export proceeds was increased from 25 to 30 percent. For every US$100 that the exporter gets from the sale of their produce, US$70 is deposited in their nostro accounts, with the local currency equivalent of US$30 transferred to the ZiG account.
“The current 70:30 retention eats into exporter earnings. Producers need more of their hard-earned foreign currency to stay competitive and grow as most of their inputs are United States dollar-denominated,” the council said.
The council is also appealing to authorities to improve roads, arguing that the bad state of some roads was negatively affecting produce quality, as it was taking long for transporters to access markets.
According to the HDC, better roads and upgraded border posts are essential to get fresh produce to markets faster and in good condition.
“Good roads make our produce globally competitive, on time and in good shape and without any degraded fruit quality.”
On ease of doing business, the council said exporters were dealing with many overlapping fees and inspections.
“A single-window export system could cut red tape, lower costs and speed things up. The National Plant Protection Organisation inspections should be part of this.”
Horticulture exporters currently need a ‘wet stamp’ document from Zimra to move produce to the market, but delays are common and every hour lost means a high risk of spoilage for the fresh produce.
The HDC also called on the Zimbabwe Investment and Development Agency to establish horticulture special economic zones (SEZs) to attract investments in the sector.
“By dedicating SEZ for horticulture, we can attract increased local and foreign investment in farming, processing and exports.”
Additionally, the council wants blueberry farmers to be zero-rated on value-added tax instead of the current VAT exemption, where they claim back the VAT.
“Changing this would reduce costs and support one of our fastest-growing export crops in the country,” said HDC.
As a way of cushioning farm workers from tax obligations and putting more disposable income in their hands, the HDC wants the Government to raise the minimum taxable income threshold.
“This will give farm workers more take-home pay, ease their cost of living and incentivise labour across the sector, as they are now falling into the income tax bracket.”
Horticultural crops are perishable and require cold-chain refrigeration and any rise in electricity tariffs increases the cost of storage and negatively affects profitability.“For utilities, we are proposing that horticulture should be classified as a priority sector so growers can access lower electricity tariffs. Power costs are a big chunk of the budget, especially for cold chains,” revealed the council.
