Tobacco is one of Zimbabwe’s top export earner and here were fears farmers would withhold their crop if they did not receive payments in US dollars
Harare — The Reserve Bank of Zimbabwe has said it will pay tobacco farmers half their earnings in US dollars after producers demanded forex payments due to a lack of confidence in the local currency.
Last year, the Tobacco and Industry Marketing Board sold 256-million tonnes of tobacco, which was the highest output since the chaotic land reform programme 20 years ago. Furthermore, the coronavirus pandemic poses a new threat to the tobacco industry as China is the largest importer of tobacco from Zimbabwe. Though the crop is exported in US dollars, the cash-strapped Zimbabwe government retains part of the forex in it’s coffers and pays the farmers in its almost worthless local currency.
In June last year, the central bank re-introduced the local currency after 10 years of a multi-currency system dominated by the US dollar and the rand. It also accepted sterling, the yen and Botswana’s pula.
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