No change has been altered in terms of tobacco farmers receiving 50% in foreign currency from sales in the current season according to Reserve Bank of Zimbabwe (RBZ), Governor Dr. John Mangudya and Tobacco Industry Marketing Board (TIMB) Chief Executive Officer Andrew Matibiri said in a joint press statement last week.
RBZ increased foreign currency retention for farmers to 50% from 30% in last year’s season after the tobacco producers threatened to withhold the gold leaf.
“Tobacco growers who have contracted loans in foreign currency shall pay the loans in foreign currency and as such upon sale of the tobacco, the foreign loans shall be payable and deducted from the proceeds of the sale of the tobacco and thereafter 50% of the sale proceeds shall be paid in foreign currency and the other 50% will be converted at the applicable exchange rate on the day of sale and paid in local currency,” Mangudya said.
“The 50% foreign currency portion shall be paid directly into the growers’ foreign currency bank accounts (FCAs) and the 50% local currency portion directly into the growers’ local currency bank accounts or e-wallets on the day of the sale.”
Tobacco farmers have always demanded foreign currency to acquire farmers inputs.
Mangudya said, “To facilitate adequate preparations and importation of inputs for the next growing season, the foreign currency entitlements for growers shall be treated as free funds and may be retained in their FCAs for an indefinite period.”
“For the avoidance of any doubt, holders of such funds are permitted to conduct inter-FCA transfers or effect foreign payments without any restrictions and the FCA balances will not be subject to any liquidation requirements.”
“Tobacco growers who require cash to settle immediate essential requirements such as transport expenses and other incidentals shall have access to cash, at a rate of ZW$1.50 per kg of green leaf tobacco sold, up to a maximum of ZW$2000.00. The maximum cash withdrawals may be reviewed as the Selling Season progresses,” he went on.
Tobacco is one of Zimbabwe’s largest producer of foreign currency.
The country is the largest grower of tobacco in Africa and the 6th largest grower in the world.
