Zimbabwe explores tobacco special economic zones to boost value addition

Zimbabwe is considering the establishment of tobacco-specific special economic zones (SEZs) to increase local value addition and boost industry revenue. While tobacco production reached 358.3 million kg this season, a 25% drop in average prices led to a 24% decrease in farmer revenue.

Industry experts suggest that SEZs, modeled after manufacturing hubs in the United Arab Emirates, could provide fiscal incentives such as five-year zero corporate tax rates, duty-free imports for processing, and accelerated capital allowances. The goal is to increase local value addition from approximately 2% to 30% and raise industry revenue to $7 billion by 2030. Currently, Zimbabwe has the capacity to produce 18 billion cigarettes annually but only manufactures about 4 billion.