Obert Chifamba Agri-Insight
RECENT exposés by Zimstats indicating that the country earned US$88 million from cotton lint exports in the year 2021 when it could have generated something in the region of US$304 million if it had exported finished products are disturbing, to say the least.
Coming at a time when everybody is seized with trying to make Government’s push for an upper middle income economy by 2030 a reality, the statistics essentially force the country to do some introspection into how the agricultural sector can easily anchor the charge towards Vision 2030 with properly planned marketing strategies.
A careful analysis of the statistics can easily show that the revenue disparity is just too big to be ignored.
This is a 247 percent difference that under normal circumstances could have made a huge impact positively on the economy of the country and its citizenry.
It is not anything that we can easily wish away as a country with clearly laid out objectives of taking the economy a rung higher by 2030.
It baffles the mind why the cotton industry does not seem to realise that the white gold it is producing and exporting every year is enriching other parties both locally and outside the borders except the farmers and the nation from which it is coming.
It is time the cotton industry does away with its Machiavellian way of doing business in which they are mainly focusing on the end result and not pausing just for a second to appreciate the collateral damage they cause in the process.
Just a few weeks ago, ginners came out guns blazing threatening to render thousands of people jobless by closing shop if they were not allowed to sell lint in United States dollars, purportedly to break even and be able to repay loans borrowed in the process of producing the crop.
One disturbing thing, though, is that these ginners are also exporting most of the lint produced in the country and only leaving a bit for the local textile industry, which literally means there will be very limited ginning and spinning.
Such a scenario means there will be few jobs created from the activities and also less products to sell outside the country’s borders.
Instead, Zimbabwean retailers will need to import finished clothing products made from their lint and export money that is supposed to be used locally.
One fact for certain is that lint exports from Zimbabwe are creating employment outside the country while locals who do the toil in the fields here will definitely miss out on the chances to secure those jobs.
The next thing is that the country’s unemployment figures will grow, yet potential job opportunities were shipped out when they could have been localised and made use of.
Zimstats statistics have also further revealed that the country exported an average of 63 million kilogrammes of various cotton products worth US$109 million annually at an average price of US$1,74 per kilogramme from 2010 to 2021, while raw cotton lint has been the country’s leading export commodity group at an average of 84 and 81 percent annually in volume and value terms respectively over the same period. What has been happening over the years is that there has been a gradual rise in the volumes of raw cotton being exported from a low of about 56 to a high of 95 percent. It will not take rocket science to realise that such a trend is worrisome and stifling economic growth, hence the need to have it reversed at the soonest possible time if the white gold is to take part in the national agenda of attaining a prosperous and empowered upper middle-income society by the year 2030.
It, however, seems there have been some half-hearted efforts to reverse the process with exports of yarn going up the ladder of the cotton value from about two percent in 2011 to a peak of 11 percent in 2016 before sharply dropping once again to a low of around 4 percent, which is currently marking the position on which the industry is sitting.
The most unfathomable reality is that the country’s textile industry has shrunk from employing around 20 000 workers in the 1990s to the current 3 500.
The current installed spinning capacity stands at 12 000 tonnes from a high of 160 000 tonnes at the height of its operations.
On the one hand, the current installed ginning capacity stands at 400 000 tonnes but with refurbishment, this could rise to 750 000 tonnes according to experts in the field. Maybe what is missing is the will to get things happening properly by players in the cotton industry.
At peak performance, the ginning sub-sector, for instance, was the employer of many people but now employs about 3 000, which is a far cry from the numbers they used to engage in the 90s.
This clearly demonstrates how dire the situation has become and may even require intervention from any direction to have operations running again and people getting jobs.
Last time it took the intervention of the Government to save the entire cotton industry from total collapse following years of protracted price wars that saw farmers opting to produce all crops but cotton.
The Government subsequently went on to extend assistance through the Presidential Inputs Scheme to revive the industry through the Cotton Company of Zimbabwe (Cottco), which explains the current resurgence of the industry.
This makes it imperative for Cottco and critical players such as ginners to have one common agenda — getting the sector working once again and starting doing their various responsibilities separately.
Cottco must have a business plan that can always come in as a contingency measure should things not go according to plan in some of the seasons and not wait for the Government to always extend a helping hand.
It may also be necessary for the Government to come up with incentives for would-be value addition entrepreneurs to invest in cotton beneficiation for increased foreign currency earnings, employment creation and general economic development. Such a development will naturally help arrest this outward flow of both forex and jobs at the expense of locals.
If possible, the Government could even start its own value addition of cotton, as one way of plugging holes through which potential revenue and job opportunities are leaking out of the country.