China helps Zimbabwe grow US$1.2 billion tobacco crop amid debt, health concerns
Driven by Chinese demand, Zimbabwe produced a record 352.7 million kilograms of tobacco – valued at about US$1.2 billion – in last year’s marketing season. This represents a major turnaround for an industry that, if not for Chinese investment, would have nearly collapsed two decades ago, although it remains a crop of concern for health…
This represents a major turnaround for an industry that, if not for Chinese investment, would have nearly collapsed two decades ago, although it remains a crop of concern for health campaigners.
As Zimbabwe’s largest agricultural export and a primary foreign currency earner, tobacco dominates its trade with Beijing. Last year, China imported US$790 million of the “golden leaf”, accounting for 31 per cent of its total imports from Zimbabwe, according to the Chinese embassy in Harare.
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How China is reshaping its economic ties with Africa
How China is reshaping its economic ties with Africa
Gorden Moyo, director of the Public Policy and Research Institute of Zimbabwe (PPRIZ), attributes these production levels to Chinese involvement, specifically by Tian Ze Tobacco Company (TZTC).
“It provided financial support through low-interest loans, zero mark-up on inputs and technical assistance to scores of contract farmers,” said Moyo, a former minister of state enterprises. The intervention proved vital after the industry was brought to its knees following the land reforms of the era of former leader Robert Mugabe that led to the exit of white commercial farmers and subsequent targeted Western sanctions.
According to the country’s Tobacco Industry and Marketing Board (TIMB), yields plummeted from 260 million kilograms in 1998 to a record low of 48 million kilograms by 2008. As Western financing dried up, China offered to revive Zimbabwe’s tobacco industry as Beijing moved to secure supplies.
A turning point arrived in 2005 when Harare signed a memorandum of understanding with the China National Tobacco Corporation, paving the way for Tian Ze, a subsidiary of the corporation.
