Zimbabwe Leverages Tobacco Sales to Ease Dollar Shortage
By CultureBanx Team
- Zimbabwe consumes less than 5% of its tobacco output
- Tobacco is the biggest success story of the government’s land reforms
Just in the nick of time before the tobacco season ends and 18 years after the collapse of Zimbabwe’s agriculture sector, sales have hit a record high of 237.1 million kilos. After bottoming out in 2008 the country’s second biggest export could help alleviate its U.S. dollar pressure. Can tobacco help lift the country out of the economic gloom its been faced with over the past decade?
Why This Matters: In 2000, the tobacco sector was dominated by white farmers who produced 85% of the crop, until the government evicted them in what some consider a controversial land seizure drive. Reuter reports that now tens of thousands of black farmers who benefited from the land reforms are growing tobacco. Farmers have embraced the cash crop by growing it on small plots of land across the country.
China is the world’s biggest smoking nation and has played a significant role in boosting the products output. Zimbabwe itself consumes less than five percent of its tobacco output. However, the product accounted for a quarter of the country’s $3.8 billion in total export earnings in 2017, behind gold, according to Reuters.
Zimbabwe did away with its own currency in 2009 and now it uses the U.S. dollar. The shortage of dollars in the country has led to obstacles with businesses importing goods they need or a return on the profits they hope to make.
Situational Awareness: Tobacco has become the biggest success story of the government’s land reforms. Ousted former president Robert Mugabe defended this reform as necessary to rebalance the land ownership.
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