Online Reporter
Martin Kadzere, Zimpapers Business Hub
TOBACCO industry experts are advocating for a more “inclusive and diversified” tobacco sector in Zimbabwe, underscoring the critical need to create greater space for smaller, indigenous players, particularly in the realm of beneficiation and value addition.
The urgent call comes amid ongoing revisions to the national tobacco policy, which various stakeholders view as a pivotal opportunity to address historical imbalances. Specifically, concerns revolve around the industry’s long-standing domination by foreign companies, particularly at the higher-income generating levels where significant value addition occurs.
Speaking at the 2025 Tobacco Conference, hosted by Zimpapers last Friday, Mr Mutandwa Mutasa, from the Zimbabwe Progressive Tobacco Farmers Association, highlighted the historical context.
“For many years, the tobacco industry has been largely controlled by what are commonly referred to as the ‘big five’ players, including international giants like British American Tobacco and others,” said Mr Mutasa.
“We have observed the emergence of smaller surrogate companies being engaged to assist in contracting and purchasing tobacco. This development is welcome, as it introduces new participants who, have the opportunity to learn and grow within the sector. However, we are concerned that these emerging players are largely confined to the primary buying stage and have yet to participate meaningfully in value addition processes. Our hope is to see them grow and thrive, as their success will contribute to the overall expansion of the tobacco industry.”
To catalyse the development of the small-scale sector and ensure Zimbabwe derives maximum benefit from its “golden leaf,” Mr Mutasa outlined several key interventions.
He proposed a phased introduction of indigenous export quotas, starting at 10 percent per season and gradually escalating to at least 30 percent, to directly integrate small-scale actors into the lucrative export process. He said this would be complemented by prioritising small-scale players in Government-to-Government tobacco export agreements, securing their market access at a national level.
Mr Mutasa called for Government provision of production and buyback guarantees, specifically for small-scale businesses, de-risking their operations and ensuring a stable market for their produce.
He also advocated for dedicated production funding, granting exclusive access to specialised financial support for small-scale actors to enhance their competitive capacity and facilitate growth.
In a move aimed at fostering local participation in higher-value activities, Mr Mutasa suggested mandating that at least 20 percent of tobacco volumes processed or exported by foreign companies in Zimbabwe be sourced through a minimum of one indigenous company acting as a surrogate. This would ensure local players gain experience and market share beyond raw leaf production.
Mr Mutasa stressed the critical importance of the deliberate appointment of indigenous personnel to key leadership positions, particularly in marketing and finance. He expressed deep concern that critical industry roles are predominantly occupied by foreigners, hindering the acquisition of essential knowledge and skills by indigenous professionals and impeding their full integration and advancement within the sector.
While Zimbabwe’s tobacco sector is hailed as a significant empowerment success, particularly at the primary production level following land reform, a critical assessment reveals that these gains have largely failed to translate into substantive benefits further down the value chain. Industry experts argue that the vast majority of profits are still externalised by foreign leaf merchants and cigarette manufacturers, leaving indigenous players with mere “crumbs.”
Historically, tobacco farming was the preserve of approximately 2 000 large-scale commercial farmers, predominantly white, who produced around 200 million kg annually, averaging 200 tonnes per farmer.
Post-land reform, the number of tobacco farmers has surged to nearly 150 000, with national production reaching a record 351 million kg this year. This shift represents a clear transfer of wealth to a much broader grower base, transforming rural communities despite sanctions.
However, the “empowerment” largely ends at the farm gate. While the top price for tobacco on auction floors is about $4,99 per kg, the same kilogramme, after blending with lower-cost tobaccos, can retail for as much as $500 in developed country markets. This stark disparity highlights that farmers participate in a mere one percent of the total value chain.
A staggering 98 percent of tobacco produced in Zimbabwe is exported in green (semi-processed) form by exclusively large, often foreign, tobacco merchants. Indigenous tobacco merchants face formidable entry barriers, including limited access to low-cost funding, long working capital cycles, exclusion from “old boys’ club” global markets, and insufficient factory processing capacity. As a result, they are relegated to roles as “speculators” on auction floors, surrogate buyers, or managers of contract growing schemes for larger merchants, all yielding negligible returns compared to the potential from direct export or manufacturing.
Policymakers are now urged to formulate a robust indigenisation roadmap for the tobacco sector. The strategy should address constraints in funding, market access and processing facilities, potentially incorporating an aggressive “Look East” agenda, focusing on niche markets through Government-to-Government deals, and leveraging regulatory power to establish alternative local tobacco processing facilities. The ultimate goal will be to ensure that Zimbabwe moves beyond being a primary producer and secures its rightful share of the lucrative value-added tobacco market, fostering genuine economic development.
Bongani Ndlovu