Zimbabwe is looking to its nascent marijuana sector to boost its flagging export sector. The country estimates that within three years, marijuana exports could surpass those of tobacco, which is the country’s its second-biggest foreign exchange earner, after mining Zimbabwe is looking to its nascent marijuana sector to boost its forex flagging export sector. earnings, estimating that within three years exports could surpass those of tobacco, which is — the country’s second-biggest forex earner after mining, contributing and contributes about 10% to GDP — within three years.
In his budget statement this year, finance minister Mthuli Ncube said medicinal marijuana and hemp exports have the potential to outstrip forex earnings from tobacco threefold by 2024.
In part, Ncube’s estimate is informed by a 2019 report by global cannabis think-tank Prohibition Partners, which predicts that cannabis could be a $7.1bn industry in Africa in two years’ time. African countries that have liberalised their marijuana markets are set to rake in most of this revenue.
But local agronomists have more tempered expectations. "In 10 years, I can safely say, industrial hemp could be ahead of tobacco, considering that there are a lot of anti-tobacco campaigns going on globally," says Zorodzai Maroveke, whose organisation, the Zimbabwe Industrial Hemp Trust, has been looking into the viability of hemp as an export earner.
Looking to cash in, Zimbabwe has spent the past three years liberalising its cannabis market. Industrial hemp, decriminalised in 2020, can be used to manufacture rope, strong fabrics, fibreboard, paper and banknotes. Medicinal marijuana, decriminalised in 2018, is sold for its reputed health benefits.
London-based Eco Equity is one of the first foreign cannabis firms to set up shop in Zimbabwe. After securing five licences for cultivation for export in 2018, the company raised R178m to kick-start production.
Once running at capacity, the company aims to produce about 15,470kg a year for the European market, generating revenue of $34m-$35m annually, based on current prices and off-take agreements.
In 10 years, I can safely say, industrial hemp could be ahead of tobacco, considering that there are a lot of anti-tobacco campaigns going on
— Zorodzai Maroveke
globally
"It’s a growing industry, and so far 2021 has been promising," says Eco Equity CEO Jon-Paul Doran.
By June, 60 marijuana growers had been licensed in Zimbabwe, most of them foreign. Amatheon Agri, a German firm listed on the Euronext exchange, is the latest licensee.
Local farmer Jesper Kirk, in Mashonaland East, has been cropping tobacco for five years, but he says he’s planning to diversify because medicinal hemp is a "much more reliable forex earner".
But it won’t be easy to outdo tobacco’s export earnings, says Welthungerhilfe agronomist Waddilove Sansole. "Tobacco is too big and well organised. Marijuana will be kept as a niche, and volumes on the demand side are still [too] low to compete with tobacco," he says.
Sansole believes Zimbabwe — and Africa more broadly — is losing a competitive edge by not promoting its local cannabis varietals, in the same way that wine from different regions is marketed for its unique qualities.
"For example, in Zimbabwe we know of marijuana being grown in Binga, but [the government] is not promoting it. Instead, it’s joining the bandwagon to grow what everyone out there is planning [to grow]," he says. "That will result in a flooded market, with blanket prices … Had it gone for a uniqueness, that would have been better."
Maroveke, for her part, sounds a word of caution to tobacco farmers looking to switch to cannabis.
"There’s a lack of knowledge and training. Great tobacco farmers can fail at the [cannabis] crop because it’s unique. Much of the crop needs to be cultivated indoors, closely monitored, and irrigated. That’s different from how tobacco is grown," she says.
It’s also capital intensive. The licence for growing marijuana, valid for just five years, costs $50,000.
The steep licensing cost "makes it an elitist venture", says Tendai Chamunorhwa, a tobacco farmer in Mashonaland West. "If you don’t have the financial muscle to take the risk, it’s not for you."
When it comes to tobacco, however, he explains that "there are no permits to talk of. In fact, there’s contract farming funded by the Chinese and other investors. You have local auction floors and you see your money right there. You can’t beat that."
A major concern among funders relates to Zimbabwe’s credibility as an investment destination, particularly given its history of land expropriation.
The Zimbabwe Investment & Development Agency has worked to allay such fears. It has been lobbying the government to put a cannabis sector strategy in place — a blueprint for the industry that stipulates investors will have full ownership of their enterprises and be protected from future legislative changes and expropriation.
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