Zim to up cigarette manufacturing

HARARE - Government’s efforts to engage Chinese and South African companies for the setting up of cigarette manufacturing plants will reduce the country’s dependence on raw tobacco exports, analysts say.

The southern African country, which recently auctioned 214 million kgs of tobacco, exports more than 90 percent of the golden leaf in its raw form.

Bulawayo-based analyst Eric Bloch told the Daily News that the latest move by government would improve value addition matrices in the country.

“This matter is relative actually; however, it will definitely reduce dependence on cigarette imports as output will definitely increase,” he said.

Despite having an array of local cigarette brands such as Madison and Pacific among others, most Zimbabweans have a penchant for imported sticks such as Marlboro, Camel, Davida and Dunhill, among others.

Industry minister Mike Bimha recently said the engagement of foreign companies in cigarette manufacturing was part of the implementation of the government’s ambitious economic blueprint, the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim Asset).

“We are engaging Chinese firms where the bulk of the crop is consumed to assist in the setting up of value-addition plants for the tobacco, considering the increase in output. This can be a way of increasing revenue inflows for the nation,” he said.

Bimha noted that the policy strategy was already in place and was expected to guarantee higher beneficiation levels through the tobacco sector.

Economic experts assert that the latest development is expected to increase cigarette output fivefold.

Zimbabwe currently has two cigarette manufacturers; the British American Tobacco and Savanna Tobacco, which produce an estimated two billion sticks annually.

The two companies have been facing challenges in exporting cigarettes to neighbouring countries.

However, independent analyst Christopher Mugaga said government was actually reversing the Indigenisation Act, a piece of legislation compelling foreigners to cede majority shareholding to black Zimbabweans.

“They are nicodemously reversing the policy which they touted in 2008 confirming there is just no room for indigenisation at the moment.

“Government is in a testimony of acknowledgement that the country is unprepared to be entrepreneurial,” Mugaga said.

The analyst said the move was proof that contrary to President Mugabe’s claims that the economy was on a rebound, “it was actually begging other countries for help”.

Another analyst, Issis Mwale said the move by government was also going to benefit locals through the competition the new firms present to existing companies.

“The addition of other players on the scene will be an advantage to the consumers as they will benefit from the obvious ripple effects of completion,” Mwale said.

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