Zimbabwe is an agro-based country since 70% of the country’s population lives in rural areas, and over 80% depends on agriculture for a livelihood. The manufacturing sector derives product inputs from agriculture and in turn provides services and inputs to the sector through backward and forward linkages. Land belongs to the Government and there is possibility of getting a 99 year lease for agriculture. There is however possibility for the purchase of farm land for farming activities. Agriculture contributes 14% towards the country’s GDP.
Agriculture is the major employer of the country’s labour force.
The Zimbabwe Investment Authority (ZIA) highlights that Zimbabwe as an agro-based economy provides abundant opportunities for investment in value addition in the following sectors:
- Tobacco– accounts for about 15% of exports. Zimbabwe’s high quality tobacco is in demand the world over and massive opportunities exist, from contract farming to value addition e.g. cigarette manufacturing.
- Horticulture– poised for a huge resurgence. Organic foods are fetching premium prices on the world market due to overwhelming demand in western countries as people are becoming more health conscious. The Netherlands has published “Agribusiness in Zimbabwe: Opportunities for Investment” highlighting the advantages of investing in this sector.
- Cotton– opportunities abound for value addition and beneficiation in this sector. Zimbabwe currently exports 70% of her cotton as lint, but it can further be processed before export.
- Livestock– Zimbabwe is rebuilding her cattle head. Opportunities to export into the regional, EU and Middle East markets exist and can be capitalised upon.
- Pig Industry– there is unfulfilled supply of pork and pork products. Opportunities to export in the region and on the world market abound.
- Poultry– Zimbabwe has been failing to meet local demand hence it imports in order to satisfy the market. Opportunities also exist to export eggs and day old chicks in the region.
- Dairy Development– The dairy sector is slowly recovering and there are huge opportunities in the production of milk and the entire value chain, for both domestic consumption and export.
- Aqua Culture– fisheries development. Zimbabwe’s fish industry is underdeveloped. Boasting of a huge array of water bodies, Zimbabwe’s fish industry has a huge potential to produce for the domestic market and export, especially to the Middle East.
- Rice Production– The country always has a deficit and therefore relies on imports to meet local demand.
- Potato Farming– Potato consumption has been increasing and this area has huge potential.
- Farm Mechanization– The land reform programme benefitted well over 300 000 households. In order to boost production mechanization of farming activities is a must. This is an area with unlimited potential for growth.
Opportunities for value addition in Agriculture
- Timber– extraction and processing presents investment opportunities for furniture manufacturing.
- Sugar milling– apart from milling, there is a huge potential in the by-products of sugar milling e.g. ethanol for blending petrol and molasses for stock feeds.
- Fruit canning and juice making– canning of vegetables and fruits creates backward linkages with agriculture.
Currently exports are unprocessed and great opportunities exist for value addition and processing.
- National Irrigation Rehabilitation and Development– there is potential to irrigate 220 000 hectares in the next five years from the current 150 000 hectares. There is need to develop new irrigation schemes and rehabilitate and modernise existing ones. Investment in irrigation would focus on rehabilitation of existing irrigation schemes, replacement and modernisation of the old irrigation machinery and equipment and development of potential irrigable land.
Special Incentives to attract investment in the agricultural sector:
Farmers Special Deductions – Farmers are allowed special deductions over and above the normal deductions, for instance expenditure on fencing, clearing and stamping land, sinking boreholes, wells, aerial and geophysical surveys.
Value Added Tax – Farming inputs and equipment are subject to VAT at 0%. Most farm inputs such as animal feed, fertilizer, plants, seeds and pesticides and equipment or machinery used for agricultural purposes are zero rated.
Links to Farmers Unions in Zimbabwe
Zimbabwe Commercial Farmers Union
Zimbabwe Famers Union
AGRIBUSINESS IN ZIMBABWE OPPORTUNITIES FOR ECONOMIC COOPERATION