Source: Mvurwi: from farm worker settlement to booming business centre | zimbabweland May 16, 2016
On the back of the tobacco boom, Mvurwi town in Mazowe district is humming. It is a hive of activity, with many new businesses and much new building. Mvurwi town had an estimated 2000 residents before land reform, but by 2012 the ZIMSTAT census report showed the population had gone up to 6500. 7500 residents were reported by Mvurwi council in 2016. Before land reform it had a small business centre, with a selection of shops, service providers and government offices, but mostly it was essentially a farm worker settlement, a dormitory town supplying labour to the surrounding large-scale white farms.
Suwoguru compound settlement was established during the colonial era. In the early days houses were pole and dagga structures, but with time the Mvurwi white business and farming community built better homes in the compound for their supervisors and clerical staff. The white business owners, managerial staff and government workers, lived a distance away, in secure, electrified homes close to what became Mvurwi CBD. Foreigner labourers were the largest group within the compound. They originated from Malawi, Zambia and Mozambique. Locals came from surrounding communal areas, such as Chiweshe, Centenary, Muzarabani and Guruve. Social life in the compound centred around the potent ‘kachasu beer’ and entertainment provided by the still popular Malawian Nyau dancers. Diverse religions were catered for including Islam, and a mosque was built.
Before land reform the central business district of Mvurwi was dominated by farm suppliers. Farmec sold farm inputs, while William Bains and KR sold farm machinery. Tractor agencies serviced large-scale farms nearby. Commercial farmers deposited their monies into Standard Bank in Mvurwi, which in turn, extended loans to them. CABS Bank was also in town before land reform. POSB served a few blacks such as farm supervisors and civil servants, while farm workers did not have bankable income. Mvurwi commercial farmers enjoyed their leisure time at a country club 8 km along the Mvurwi-Centenary road and at another one at Mutorashanga. A police station and hospital were also present.
Mvurwi has long been a centre for government offices. But with increasingly populations there are greater demands for services. Today from the Ministry of Agriculture there are 17 Agritex staff, 15 Vet, 2 Plant Protection and 6 Mechanisation staff. There were only 8 Agritex staff pre land reform. Health services have also expanded. Mvuri hospital currently employs 120 workers, up from 60 workers in the past. The hospital serves up to 600 patients per month, double earlier numbers. A clinic was registered after land reform and employs 8 workers. There are 36 Ministry of health extension workers covering Mvurwi locations and CBD, up from 16 in the past. In addition there are 5 primary schools (each with around 800 pupils), up from 3 before land reform and 3 secondary schools, up from 2 before land reform.
Tobacco: the core of the economy
Since land reform the economy of Mvurwi has changed, and there has been significant restructuring as well as growth. Money from tobacco has of course been the driver of growth in Mvurwi since its establishment. But in the past profits were shared among relatively few large-scale white commercial farmers. While workers rented accommodation and would buy basic provisions, their presence in Mvurwi did not generate significant growth. This all changed following 2000, and particularly after 2009 with dollarization, and the expansion of tobacco growing in the area.
There are a number of tobacco buyers and agents in Mvurwi. The TIMB has its offices in the town, and has 4 permanent workers based in Mvurwi. The Mashonaland Tobacco Company has an estimated 28,000 tobacco growers with plantings ranging from 1ha to 120 hectares. 85 % of growers are A1 and CA and 15 % in A2 farms. Tobacco is also bought by Tianze, a Chinese company, and by BAT. ZLT is a big American international company led by Phillip Morris. All in all there are 13 tobacco companies in Mvurwi.
Since land reform, there has been a building boom, with funds from local tobacco farmers and business people driving an expansion of housing. Rusununguko Phase 1 was the first initiative of Mvurwi council, involving 900 stands. Tenants included former employees of white businesses and top former commercial farm employees who used their retirement packages to buy residential stands. After land reform local indigenous business owners, A1 farmers and well to do individuals acquired residential stands. Sizes range between 200 square meters and 600 square meters, and cost around USD 4500. Electricity and tower lights were provided, and Mrs C built a guest house in the residential area.
Another high density location Rusununguko Phase 2 was implemented as a cooperative led by local people. So many problems were encountered mainly due to funding constraints. UNDP and UNICEF provided water and constructed sewer systems, and ZINWA is now servicing the area, although electricity and road networks are yet to be put in place. In a further development (Kurai Phase 1), council allocated 1080 stands to low income earners measuring 300 square meters each. Indigenous construction companies were given tenders by council to carry out development of the location. Servicing of stands started in 2014. Water, sewers and road construction are almost complete. Four houses have since been built. The former Mazoe MP earlier on bought around 150 stands in the location which he allocated to his supporters. He was later implicated in externalization of funds and fled the country, but most beneficiaries held on to their stands.
A number of medium-density areas are also being developed (Kurai Phase 2, Mbizi). The council is offering stands, but servicing of these is taking time. Mbizi is a favourite investment destination for successful A1 farmers. 70 % of the 500 plot holders have completed building of their homes, creating many jobs, and local hardware shops have also profited. Land was allocated to 2 churches, 1 school and 2 creches, but nothing is on the ground yet. In the past low density areas were dominated by retired whites, but demand has grown. Pembi view and Dombomaringa are two new suburbs, with 750 stands pegged with costs of USD 5 to USD 7 per square meter. A good number of owners are A2 farmers and local business people. Land was also allocated to 1 secondary school and 3 creches.
Across all these residential developments, around 85 commercial stands have also been allocated in the hope that business will increase. Most current business activity is however in and around the CBD, and near the original township area. The massive building projects on-going have generated business for hardware stores in particular. There are currently 23 hardware shops in Mvurwi employing 46 workers compared to only four before land reform that employed 28 workers. Tractor, truck and lorry owners made money transporting building materials, and these transport business have also expanded. Today there are also 8 brick moulding groups in Mvurwi compared to none before land reform. There are also 4 sawmills in Suwoguru, owned by local individuals, all established after land reform, and providing materials for new homes. Saw millers buy raw timber from the resettlement farmers, add value and sell the sawn timber to carpenters who made doors, cabinets and roofing materials that they sell to those building houses.
A changing business environment
Following land reform a number of businesses closed as the economy restructured. Farmec and William Bain closed shop around 2008, The four trator agencies closed down, as demand for tractor services in the new farms was being met locally. Delta Beverages also closed in 2015 citing operational losses, and lack of a stable maize supply for brewing with a resulting loss of around 50 jobs. There has been a shift in financial institutions too as the economy restructured, with Standard Chartered and CABS closing, while CBZ and Agribank have established operations, and the government owned POSB continued. The current 3 banks employ 24 people – less than the pre land reform banks when 32 workers were employed. There has been a massive shift to the informal economy, with many people creating livelihoods from new, informal businesses.
In the past a few farm supply shops sold inputs to large-scale commercial farmers. However many such farmers bought wholesale in Harare, and did not frequent local shops. Today, following land reform, business has expanded locally but with a new customer base, and different demands. The old shops – Agricura, Farm and City and Mashco – still continue (in some cases cashing in also on hardware supplies) – but they have been joined by new investors including, Nico Orgo and Omnia, along with many other smaller indigenous businesses. Stock feed and day old chick suppliers have also prospered. There are 5 stockfeeds shops now that sell day old chicks and animal feeds. Profeeds a subsidiary of Irvines sells chicks, point of lay pullets, vets and feeds. Windmill also sells feeds of all farm animals. Other stockfeed shops include Fivet, Farm and City and Northern Supplies.
A multiplicity of enterprises have opened in Suwoguru and Mvurwi CBD following land reform. Expansion has occurred in certain areas. Butcheries have expanded from 3 to 14, with employment growing from 6 to 30. Equally bars and bottle stores are increasing. Today there are 11 registered beer outlets in Suwoguru and CBD that employ 55 workers, compared to 9 beer outlets, employing 45 people, before 2000. General ‘tuck shops’ selling mainly clothes and items from clothing, cellphones, electrical gadgets, to kitchen ware have expanded, with about 70 stalls at Suwoguru market. The Chinese have also set up shops, and also employ locals in their stores. Eco-cash and airtime vendors are plentiful. There are over 20 registered, but also many more working informally in Mvurwi. There is now one Internet café, and 10 photocopy shops and typing service shops. With increased car ownership there are now 6 service stations and 3 car washes, all opened since land reform.
Such businesses operate at different scales, and often interact. For example, Golis supermarket in Mvurwi is the big wholesaler with cheaper prices, and has been long established. Before land reform there were also 10 other grocery shops employing around 30 workers. By 2015 grocery shops had increased to 32, employing about 96 workers. Market vendors complement the formal shops. The market area has expanded significantly since land reform. MN is a female vendor aged 35:
“I buy and sell various farm produce like vegetables and tomatoes but my main business is buying and selling sweet potatoes. I buy sweet potatoes from farms and hire scotch carts to bring the produce to the tar road. A cart can carry 36 buckets and transport charge is US 3 per trip. At the tar road Kombis charge USD 9 to ferry the 36 buckets to my market stall in Mvurwi township. I buy sweet potatoes at farm gate for USD 3 per bucket and sell at USD 5 per bucket. I manage to buy and sell 36 buckets per week. I am the sole owner of the business which has helped me buy a residential stand and pay school fees”
Agro-dealers bring in produce from as far as Muzarabani and Guruve to Suwoguru and Mvurwi CBD markets. A wide range of products are brought which include masau berries, indigenous chicken, cucumbers, tomatoes, rape, covo, water melons, cabbages, onions, carrots, green mealies, apples and bananas.
Some of this is sold on to food outlets. There are now 11 food outlets in Mvurwi CB and 9 in Suwoguru location. The 20 food outlets employ 60 workers compared to the 6 food outlets pre land reform that employed 20 workers. We interviewed owners of food business outlets in Mvurwi CBD who get their supplies from agro- produce dealers. Mrs G, aged 60, owns Gogo’s Chikenland
“I have two outlets one in Mvurwi CBD and another in the Suwoguru towship. I buy Irish potatoes from local farmers which I process into chips served with chicken. I employ a driver who earns usd 300 per month as well as 6 other permanent workers. Business constraints include load shedding and poor quality potatoes at times. Other income sources include a boarding house in town which accommodates up to 60 school children and a creche which takes 50 children. I have plans to build a primary school. I own 2 private cars and a house in Mvurwi’s low density surburb. I also bought 3 residential stands.”
Transport business is key in and around Mvurwi. Business involves carrying passengers, inputs/ produce and building materials. Buses, kombis, lorries, trucks are readily available. All roads from Harare, Mtorashanga, Guruve, Centerary and Muzarabani pass through Mvurwi.
Local transporters with 30 tonne trucks were given transport contracts by some of the 13 tobacco companies in Mvurwi. We interviewed Mvurwi CBD based transporter, Mr DK:
“I own 3 x 30 ton trucks. I carry tobacco and tobacco fuelwood between April and September. I transport fuelwood to Chiweshe, maize to Mvurwi and tobacco to Harare. The main business challenge is competition from transporters using smaller trucks. Customers prefer them because they fill up quickly and farmers get to the market in time. More and more farmers are also buying their own trucks.”
Brick moulding and transport are linked. About 90% of houses built in Mvurwi used common farm bricks giving livelihood opportunities to the ordinary brick moulder as well as transporters and loaders. Bricks sell at USD 30 per thousand and USD 15 to transport. On a good day a loader can get USD 8 while a transporter can get USD 80 after accounting for fuels. Brick moulders also sell pit sand, river sand and quarry stones.
A fast changing urban centre
Driven by local agricultural activity, there has been growth across a variety of sectors. Opportunities have expanded, particularly in the informal sector. Tobacco profits are the main driver, although in the last year these have been down, and some are questioning the long-term sustainability of the sector. Farmers are moving to other products, including irrigated horticulture, and this will continue to drive demand for services in Mvurwi, and when profitable will provide the basis for further investment. Unlike in the period before land reform the economy is increasingly localised, with benefits generated in towns like Mvurwi.
Yet despite this growth, there are multiple challenges for small towns in largely rural areas. How should urban policy respond to changes in the agrarian sector, how can local economic growth linked to agriculture be sustained, and what new thinking around physical planning, town development and governance is needed? These policy questions will be the focus for next week’s blog.