Low tobacco prices dampen informal trading

Published: 17 March 2014

INFORMAL traders in Harare have said they have not yet cashed in on proceeds from tobacco sales this year as most farmers have been affected by low prices obtaining at the auction floors and are not keen on spending their money in the capital.

A blanket merchandiser at Gulf Complex, Tabeth Chipwere, last week said tobacco farmers used to be her major customers this time of the year.

"I was looking forward to having received sales from farmers as in December business was low. As you are aware, blankets are not something that is bought every day. I am now struggling to pay the $170 rentals required for my stall," she said.

Decent Chapfika, another informal trader who sells radios, solar batteries, two-plate stoves and television sets, also said business was still low.

"If the tobacco farmers are paid, it will be better. Some days if things are better we get over $150," Chapfika said.

Guidence Makani said sometimes they recorded no sales due to the liquidity crisis in the economy. He said moving to the auction floors was not a wise idea as the place was already congested with traders.

"The rentals have declined to $1 200 for most shops here because people cannot afford to pay the high rentals," he said.

Tobacco has been Zimbabwe's major success story with many farmers rushing to the golden leaf although the Tobacco Industry and Marketing Board has bemoaned the low quality produced this year.

The golden leaf has been sold for as little as 20 cents per kilogramme this season due to poor quality. Since 2009, the output and earnings from tobacco for the country have been on the rise.

The informal sector constitutes over 70% of the country's business transactions and has created employment opportunities for many people who have failed to make it in the formal sector. It is believed $3 billion exchange hands in the sector.

- newsday

Tags: Tobacco,