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Exports

Enhancing Earnings through Value Addition: A Critical Strategy for Zimbabwe's Economic Growth

Strategic Insights

— 2 min read

The Government of Zimbabwe is emphasizing the importance of adding value to goods as a key approach to increase earnings and achieve the objectives outlined in Vision 2030. This strategy involves transforming raw materials into higher-value products, thereby boosting economic growth, creating jobs, and fostering innovation. Lands, Agriculture, Fisheries, Water and Rural Development Deputy Minister, Vangelis Haritatos, emphasized the need to add value to agricultural products before exports, as the country aims to move from exporting low-priced raw commodities to high-value finished products.

Key Takeaways:

  • The Government of Zimbabwe is prioritizing the value addition of goods as a crucial strategy to enhance earnings and achieve the goals outlined in Vision 2030.
  • Agriculture Minister, Vangelis Haritatos, emphasized the need to value-add agricultural products before exports, citing that the country must move from exporting low-priced raw commodities to high-value finished products.
  • Upper-middle-income economies have a Gross National Income (GNI) per capita between US$4 466 and US$13 845, according to the World Bank.
  • Tobacco export earnings in Zimbabwe rose from US$1 297 280 021 in 2023 to US$1 427 109 343 last year, with partly or wholly stemmed/stripped tobacco accounting for 92 percent of the earnings.
  • Analysis of average prices for different product classes shows that cigars, cheroots, and cigarillos containing tobacco had the highest prices of US$41.67 per kilogram, followed by tobacco that was partly or wholly stemmed/stripped at US$7.22 per kg.
  • Zimbabwe could earn a higher price of US$10 on a premium cigar on the same gramme, compared to the current average price of US$0.06 per gramme.
  • Export earnings from raw cotton (cotton, not carded or combed) exports reached US$15 635 815 in 2024, with a total of 10 369 943 kilogrammes exported at an average price of US$1.51 per kg.
  • Had the country exported cotton linters, cotton yarn, and men's or boys' shirts instead of raw cotton, the country would have earned US$106 943 718.
  • Value addition has the added advantage of creating more jobs across agro-industries and manufacturing, as well as enhancing skills development and technology transfer.

Statistics:

  • Average price of tobacco that was partly or wholly stemmed/stripped: US$7.22 per kg
  • Average price of cigarettes containing tobacco: US$6.16 per kg
  • Average price of cigars, cheroots, and cigarillos containing tobacco: US$41.67 per kg
  • Tobacco export earnings in 2023: US$1 297 280 021
  • Tobacco export earnings in 2024: US$1 427 109 343
  • Export earnings from raw cotton (cotton, not carded or combed) exports in 2024: US$15 635 815
  • Average price of raw cotton (cotton, not carded or combed): US$1.51 per kg
  • Total exported raw cotton (cotton, not carded or combed) in 2024: 10 369 943 kilogrammes
  • Potential earnings if raw cotton was value-added to men's or boys' shirts: US$104 487 214

Sources:

  • World Bank
  • World Bank, "Gross National Income (GNI) per capita" (no date)
  • Zimbabwe National Statistics Agency (ZimStats), "Tobacco Export Earnings" (2024)
  • Zimbabwe National Statistics Agency (ZimStats), "Cotton Export Earnings" (2024)

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