Did you know 70% of the population depends on the agricultural sector of Zimbabwe?

Yes, agriculture plays a significant role in Zimbabwe’s economy. Zimbabwe is a country in Southern Africa, mainly known for its landscape and diverse wildlife. The agricultural sector of Zimbabwe provides food security, employment for the population. There are five main cash crops to invest in Zimbabwe’s agriculture. 

This article explores the investment opportunities in the top five cash crops of the agricultural sector in Zimbabwe. 

The agriculture sector plays an important role in Zimbabwe’s economy. It contributes to the economic growth, employment, and exports of the country.

1. Food security: Farmers produce a huge range of crops such as maize, millet, sorghum, and soybeans, which are consumed locally and exported to other countries. This can help reduce food insecurity and malnutrition.
2. Employment Opportunities: Agriculture not only creates job opportunities for farmers but also for those involved in transportation, storage, and marketing. The sector is providing employment for about 70% of the population. 

Economic Growth: The agricultural sector of Zimbabwe contributes about 15% to the country’s GDP. It is the country’s second largest source of export earnings. It provides 60% of the raw materials for the manufacturing sector.

1.Tobacco

According to a current report, Zimbabwe plans to create a $60 billion tobacco industry by 2028. To boost income, the government is working to increase processing and increase value addition from 2 percent to 30 percent(roughly). The country earns about $1billion from its annual tobacco exports, contributing to about 6 percent of the global market.

Tobacco is the country’s top cash crop. It brings in about $1 billion each year from exports, making up around 6% of the world market. Zimbabwe mainly exports its tobacco to Asia, especially China. The country hopes to raise production to 300,000 tons by 2025. 

In 2022, Zimbabwe produced just over 260,000 tons of tobacco, sold at an average price of $4.20 per ton. Most tobacco is grown by small-scale farmers, and the industry provides many jobs.

2.Cotton

Cotton contributes about 10% to Zimbabwe’s agricultural GDP. It is Zimbabwe’s second most important cash crop. Zimbabwe’s cotton is known for its high quality and can produce up to 600,000 tonnes a year. However, in the 2020/21 season, only 116,052 tonnes were produced. Production dropped further in 2021/22 due to late rains that delayed planting.

From 2016 to 2020, cottonseed production rose by 184%, from 33,000 to 93,000 tonnes. The country has 22 ginneries with a total capacity of 750,000 tonnes per year. Most cotton is grown under contract farming, where companies provide farmers with inputs, such as seeds and fertilizers, on loan, then purchase the cotton after harvest, deducting the cost of the inputs.

Promoting the spinning and weaving industry could help grow the local clothing sector. Experts from the National Biotechnology Authority believe improved seed varieties and GMOs increase cotton yields and fabric quality. However, the government is not yet ready to fully support the use of GMOs.

3.Soybeans

Local demand for soybeans is on the rise owing to their use in cooking oil, stock feeds, other foods, and industrial needs. Zimbabwe requires about 240,000 metric tons of soybeans annually, but local production stands at an estimated 71,290 tons, enough to meet only 30 percent of national demand.  

Despite the government’s command soybean program, introduced in the 2017/2018 season, Zimbabwe still depends on soybean imports from Zambia and Malawi.

Soybeans grow in a short season and can give farmers a good profit, up to 200% return on investment. The war in Ukraine has also increased the need to grow more soybeans, as some countries are limiting their exports of soybean oil.

4.Corn

Corn is Zimbabwe’s principal food crop.  According to a June 2022 Foreign Agricultural Service (FAS) Grain and Feed Annual report, in the 2022/2023 season, the country produced about 1.6 million tons, 43% less than the 2.7 million tons grown the previous year.

Because of the drop, the Government of Zimbabwe lifted a ban on corn imports introduced in May 2021 and announced a plan to import 400,000 metric tons. The lower harvest was caused by macroeconomic challenges, poor weather, high farming costs, and economic challenges.

5.Wheat

Russia’s war in Ukraine caused global grain shortages, which resulted in higher food prices. This pushed Zimbabwean commercial farmers, with help from the government, to grow more wheat.

In 2022, they produced 375,000 tons of wheat. This was Zimbabwe’s biggest wheat harvest since the 1960s. The country grew enough wheat to meet local needs. There was even a small surplus of 20,000 tons for emergency reserves.

This public-private partnership made this success possible. The government provided support to the small-scale farmers. Private organizations also provided loans to commercial and contract farmers.

The agricultural sector of Zimbabwe has significant potential for investment. To invest successfully, investors must also understand the challenges of the agricultural industry. 

1. Climate Change: Agricultural productivity is being affected negatively by droughts, floods, and rising temperatures. Due to limited resources, farmers are also ill-equipped. Taking precautionary steps prevents disasters. The government is taking initiatives to support farmers in this regard.
2. Limited Access to Credit: Banks have small agricultural loan portfolios, which makes it difficult for farmers to invest in their farms. The government and private organizations are preparing for a smoother transaction process. 
3. Inadequate Infrastructure and Technology: Irrigation infrastructure has declined since the land reform program. Investors can support improving the infrastructure with the government.
4. Low Soil Fertility: Soil fertility is low in Zimbabwe, which results in low production of crops and loss of farmers and businesses. Advanced technology, sharing knowledge, awareness, and training programs are beneficial in this regard.
5. Reliance on Rain-fed Systems: The country’s agricultural sector highly depends on rain-fed crop production. Using advanced technology with a proper strategy will help farmers with this.

Zimbabwe’s agricultural sector is significant to its socio-economic development. The potential for investors is massive in this sector. As agriculture supports the livelihoods of most of the population, it is a major force of economic growth and stability in Zimbabwe. This growth and development contribute to the country’s GDP and export earnings. 

Inventors can benefit significantly by investing in Zimbabwe’s agricultural sector through technology and sustainability. With proper strategy and initiatives, investors can earn more profits and contribute to the economy. This will be beneficial for both investors and the nation. So this is your time to step in as an investor!