Zimbabwe is likely to produce 205 million kgs of tobacco this year, slightly more than 2016, with sales of its main export likely to improve dollar supplies in the cash-strapped economy, an industry official said on Wednesday.
Marking the start of annual tobacco auctions in Harare, Tobacco Industry and Marketing Board spokesman Isheunesu Moyo said output would climb from 202 million kgs in 2016 after more farmers grew the crop.
Tobacco earns more than gold and platinum.
Moyo said tobacco buyers had borrowed $700 million offshore to purchase the crop from farmers. The merchants process the leaf before exporting it, mostly to China, the largest investor in the Southern African country.
Zimbabwe is desperately short of dollars due to its moribund economy, although traditionally liquidity improves during the tobacco-selling season as cash is brought into the country.
Agriculture Minister Joseph Made said tobacco farmers would be allowed to withdraw $1,000 from banks per day to allow them to purchase farming inputs for next season.
Cash shortages in the last 12 months have forced banks to impose daily maximum withdrawal for most Zimbabweans of sometimes as little as $50 per day.
President Robert Mugabe’s government blames the shortages on the illegal export of U.S. dollars, weak commodity prices and falling remittances from Zimbabweans in the diaspora.
Credit: CNBC Africa