Online Reporter
Edgar Vhera
Specialist Writer – Agribusiness
Government is prioritising the value addition of goods as a crucial strategy to enhance earnings and achieve the goals outlined in Vision 2030.
This is targeted at transforming raw materials into higher-value products, thereby increasing economic growth, creating jobs and fostering innovation.
Lands, Agriculture, Fisheries, Water and Rural Development Deputy Minister, Vangelis Haritatos, underscored the need to value-add agricultural products before exports during a recent Zimbabwe-European Union (EU) business forum, stating that the country must move from exporting low-priced raw commodities to high-value finished products.
“Zimbabwe grows some of the best tobacco in the world, yet we mainly export it raw,” he said.
According to the World Bank, for the 2024 fiscal year, upper-middle-income economies have a Gross National Income (GNI) per capita between US$4 466 and US$13 845.
Statistics from the Zimbabwe National Statistics Agency (ZimStats) show that tobacco export earnings rose from US$1 297 280 021 in 2023 to US$1 427 109 343 last year.
Zimbabwe exports its tobacco as partly or whole stemmed/stripped tobacco or not stemmed/stripped, refuse, smoking tobacco, cigarettes containing tobacco, manufactured tobacco, as well as cigars, cheroots and cigarillos containing tobacco.
Partly or wholly stemmed/stripped tobacco accounts for 92 percent of the earnings, with cigarettes containing tobacco in second place at seven percent.
Analyses of average prices for different product classes show that cigars, cheroots and cigarillos containing tobacco had the highest prices of US$41,67 per kilogramme followed by tobacco which was partly or wholly stemmed/stripped at US$7, 22 per kg.
Cigarettes containing tobacco came third at US$6,16 per kg while smoking tobacco was in fourth position at an average price of US$5,66 per kg.
While Zimbabwe’s average price is US$5, 75 per kg (US$0,06 per gramme), a premium cigar such as Cohiba Behike gets a high price of US$100 or more per 10 to 15 grammes stick.
So, while Zimbabwe is getting about US$0,06 per gramme, it could get a high price of US$10 on the premium cigar on the same gramme.
The same can be said of cotton, which is being exported raw.
ZimStats statistics show that export earnings from raw cotton (cotton, not carded or combed) exports reached US$15 635 815 in 2024.
A total of 10 369 943 kilogrammes was exported at an average price of US$1,51 per kg.
If this raw cotton was value added to men’s or boys’ shirt, then the country would have earned US$104 487 214.
The country also exported cotton linters and yarn and earned US$141 412 and US$2 315 092 respectively.
Had the country exported cotton linters, cotton yarn and men’s or boys’ shirts (instead of cotton, not carded or combed) from the total mass of 11 866 418 kg exported in 2024 then the country would have earned US$106 943 718.
The country is also losing out by exporting its macadamia nuts raw instead of packaged, premium snacks.
The same also goes for hides, which are exported raw instead of being tanned and turned into leather goods.
Value addition has the added advantage that it creates more jobs across agro-industries and manufacturing, as well as enhancing skills development and technology transfer.
