RBZ yet to announce tobacco payment modalities

Source: RBZ yet to announce tobacco payment modalities | eBusiness Weekly

RBZ yet to announce tobacco payment modalities

Business Writer

The Tobacco Industry and Marketing Board (TIMB) says payment modalities for the 2021 tobacco marketing season will only be established after the announcement of this year’s monetary policy statement.

Previous payment modalities have been attributed among other factors responsible for tobacco production decline.

Tobacco production has been plummeting on an average 20 percent as frustrated farmers ventured into other crops.

The payment system this year is also likely to see production either going down or up next season as farmers again respond to the payment matrix.

Reserve Bank of Zimbabwe (RBZ) Governor Dr John Mangudya, is expected to present this year’s monetary policy statement any time.

In an interview, TIMB chief executive officer Dr Andrew Matibiri, said nothing regards the payment modalities for this year’s tobacco crop has been made.

“We are still waiting for the Reserve Bank to decide… at the moment we don’t know. I think maybe in about a week’s time we would be knowing,” he said.

“I think we are waiting for the monetary policy statement first, but its (monetary policy statement) due sometime this week.”

Last year, tobacco farmers were paid half their earnings through their Zimbabwe dollar accounts with the remaining half being deposited into their Foreign Currency Accounts. However, most farmers faced difficulties in accessing their hard currency due to failure to appreciate the processes involved.

It is believed that announcing the payment system ahead of the opening of the selling season gives impetus to the way tobacco growers prepare their crop for the market as they need to plan for payments to many service providers that they dealt with throughout the cropping season.

While no date has been set for the opening of the 2021 tobacco marketing season, industry players are weighing Covid-19 mitigatory measures as preparations for the opening of the season are at an advanced stage.

Usually, the tobacco selling season begins between February and March with the crop delivered at the floors either through contract arrangement or auction system.

Farmers are optimistic of positive yields on account of the good rainy season.

The golden leaf is Zimbabwe’s major foreign currency earner after gold, generating over US$1 billion annually. The tobacco marketing season is known to be a time when liquidity in the economy improves, as there will be fresh capital injections coming with the merchants licenced to do business locally.

Last year, a total of 185 million kgs of the golden leaf were delivered at the auction floors while basing on early estimates, this year’s yield is projected at 200 million kgs.

Zimbabwe’s flue-cured tobacco is consumed around the world with the United Arab Emirates being the major consumer of the golden leaf from the country.

Tobacco farmers finance their operations using 100 percent in foreign currency mainly sourced from the black market but come marketing season a huge chunk of the money is paid in local currency calculated at official rate.

COMMENTS

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    Dr Ace Mukadota PhD 2 weeks ago

    Tobacco farmers will get RTGS or ZW dollars and the RBOZ will get all the US dollars comrades. This is how it works in ZW – the RBOZ will sell the cheap USD to its friends & ZANUPF accolytes at 84 to one USD and those same lucky people will sell the USD on the real black market for 130 to one USD.
    Fifty four percent profit in one day comrades ! – This wheeling & dealing is more profitable than dealing drugs, cigarettes or even giold trading in ZW.
    Morale of the story – ensure you have friends in both ZANUPF and the RBOZ – the ones who decide who hands out the cheap US dollars.