Staff Writer 
KEY stakeholders in the horticultural sector have called on the Government to abolish the 25 percent foreign currency export retention policy, arguing that the regulation hampers the industry’s growth and competitiveness.
In 2023, the Reserve Bank of Zimbabwe (RBZ) issued an exchange control directive establishing a uniform foreign currency retention threshold of 25 percent for all export sectors. This move eliminated any special allowances previously granted to specific industries.
Speaking to The Financial Gazette, chief executive of Kuminda, Clarence Mwale, highlighted how the policy continues to threaten profitability and growth within the horticultural export business.
“Our primary challenge in this country is the difficult business environment. All our inputs and production costs are denominated in foreign currency. However, when we repatriate our earnings, we are required to convert 25 percent of the proceeds, which adds to our financial burden,” he explained.
The policy, he noted, has a detrimental impact on business planning, making it difficult for exporters to ensure profitability for farmers and to maintain or increase their numbers in the years to come.
Mwale stressed the need for policymakers to reassess the 25 percent retention rate, particularly for small-scale farmers, arguing that a re-evaluation could enhance their financial viability and support sustainable agricultural practices.
“Farming on scales of
2 000 hectares or 100 hectares is significantly different from a family cultivating one or two hectares for subsistence. For small-scale farmers, deducting 25 percent from their proceeds often represents their entire profit,” he said.
Small-scale farmers constitute the majority of Zimbabwe’s agricultural producers and play a critical role in ensuring national food security. They provide a substantial portion of the country’s food supply while fostering local economic growth.
“The future of agriculture lies in small-scale farming, which offers significant opportunities,” said Mwale.
He pointed out that international markets increasingly recognise the value of collaborating with small-scale farmers, appreciating the profound impact such partnerships have on local communities.
Kuminda collaborates with around 5 000 small-scale farmers organised into 71 distinct associations.
“It is essential that we fully acknowledge the role of small-scale farmers. Given the significant land they occupy, their contributions could greatly enhance the country’s agricultural output, particularly in bolstering revenue for the national budget,” Mwale added.
The Horticulture Development Council (HDC) also urged the Government to implement policies aimed at strategically enhancing the capacity of small-scale farmers to foster export growth.
“Such policies should focus on improving infrastructure, providing market access, and offering technical support. By creating an enabling environment, farmers could increase production, meet international standards, and effectively tap into global markets,” said HDC chief executive, Linda Nielsen. By Elton Manguwo
