Semi-Manufactured Gold and Tobacco Lead Zimbabwe’s Export Surge, Highlighting Need for Beneficiation

Zimbabwe’s export landscape is heavily dominated by semi-manufactured gold and tobacco, underscoring the urgent necessity for aggressive beneficiation strategies to maximize economic benefits and reduce environmental impacts.

Dominance of Semi-Manufactured Exports

Recent data from the Zimbabwe National Statistics Agency (Zimstats) reveals that during the period ended September 30, 2024, a staggering 40.2% of the country’s gold exports and 19.3% of tobacco exports were semi-processed. This trend highlights a significant reliance on products that have undergone minimal processing before being shipped abroad.

“These figures indicate a critical dependency on semi-manufactured goods, which not only limits the potential economic gains but also exacerbates environmental degradation,” noted Mr. Labram Musah, Executive Director of Programmes at VALD-Ghana, during a presentation on sustainable agricultural practices.

The Urgent Need for Beneficiation

Zimbabwe has faced substantial economic losses over the years due to the export of raw commodities. Market observers argue that beneficiation—processing raw materials into finished products domestically—could transform the industry by fostering the creation of downstream, labor-intensive industries.

“Beneficiation would create backward and forward linkages, making the industry more interdependent and resilient,” said Dr. Alex Kombat, Senior Revenue Officer of the Zimbabwe Revenue Authority. “This would not only boost the economy but also provide numerous employment opportunities across various sectors.”

Benefits of Beneficiation:

• Economic Growth: Higher value-added products can significantly increase export revenues.
• Job Creation: Developing downstream industries generates more employment opportunities.
• Reduced Environmental Impact: Processing materials locally can implement more sustainable practices.
• Enhanced Competitiveness: Finished products are often more competitive in global markets than raw materials.

Impact on Trade Deficit

Despite strong export figures in certain sectors, Zimbabwe continues to grapple with a growing trade deficit. In September 2024, imports totaled USD 782.6 million, a 10.4% decrease from August but still resulting in a trade deficit of USD 207.6 million—an increase of 4.2% from the previous month.

Key Import Sources:

• South Africa: 36.8%
• China: 19.2%
• Bahamas: 6.1%
• Singapore and UAE: 4.6% each

These figures indicate a heavy reliance on a few key countries for imports, which can be risky given global economic fluctuations.

Environmental Degradation and Sustainable Practices

The export of semi-manufactured gold and tobacco has left significant environmental footprints in Zimbabwe. Large-scale mining and tobacco farming have contributed to deforestation, soil erosion, and water contamination.

Mr. Musah emphasized the importance of aligning with international sustainability standards. “Implementing the Sustainable Tobacco Programme (STP) is essential to mitigate environmental damage and promote responsible farming practices,” he stated. This initiative, supported by British American Tobacco, focuses on environmental management, social and human rights, and overall sustainable production.

Increasing Grower Registration

In a bid to expand and stabilize the tobacco industry, Zimbabwe has registered more than 107,000 tobacco growers for the 2024/25 cropping season—a 16% increase from the previous year. This surge includes:

• Communal Farmers: 59,656
• A1 Farmers: 36,340
• Small-Scale Tobacco Farmers: 5,610
• A2 Small-Scale Commercial Farmers: 6,368

This diverse registration base aims to distribute economic benefits more evenly and promote sustainable farming practices across various scales.

Challenges in Exporting Raw Commodities

Exporting raw commodities presents several challenges:

• Price Volatility: Raw materials are subject to fluctuating global prices, impacting revenue stability.
• Limited Value Addition: Without processing, Zimbabwe misses out on higher profit margins associated with finished goods.
• Environmental Costs: The lack of beneficiation leads to unchecked environmental degradation, which can have long-term economic repercussions.

Strategic Recommendations for Zimbabwe

To address these challenges and harness the full potential of its natural resources, Zimbabwe must implement robust beneficiation strategies:

1. Invest in Processing Facilities

Building and upgrading local processing facilities will enable Zimbabwe to add value to its raw commodities before export. This can be achieved through public-private partnerships and international investments.

2. Enhance Skills and Training

Providing training programs for workers in downstream industries will ensure that the local workforce is equipped to handle more complex manufacturing processes, thereby fostering economic resilience.

3. Implement Sustainable Practices

Adopting sustainable farming and mining practices will not only protect Zimbabwe’s natural resources but also align the country with global environmental standards, making its exports more attractive to eco-conscious markets.

4. Diversify Export Products

Expanding the range of exportable products beyond gold and tobacco can reduce dependency on a few commodities, thereby stabilizing export revenues and mitigating risks associated with market volatility.

Future Outlook

Zimbabwe stands at a crossroads where strategic implementation of beneficiation can significantly enhance its economic landscape. By transforming raw exports into high-value products, the country can reduce its trade deficit, create jobs, and promote sustainable development.

As Zimbabwe moves forward, the collaboration between government bodies, industry stakeholders, and international partners will be crucial in realizing these goals. The path to a more prosperous and environmentally sustainable future lies in the hands of those who can navigate the complexities of economic reform and environmental stewardship.