News Update as @ 1530 hours, Thursday 24 2014Feedback: bh24admin@zimpapers.co.zwEmail: bh24feedback@zimpapers.co.zw

By Tawanda Musarurwa

Additional revenue and expenditure measures taken by the Government will contribute an additional $933 million to the fiscus, Finance Minister Patrick Chinamasa has said.

Over the past few years the Zimba-bwean Government has been suffering from constrained space due to under-performing revenue and expenditure overruns, but the Government is in the

process of creating fiscal space by boost-ing domestic revenue mobilisation and re-prioritisation of expenditures. In a letter of intent to the International Mon-etary Fund, Minister Chinamasa said the additional revenue and expenditure measures will contribute $933 million to the fiscus, which is approximately 6,9 percent of current Gross Domestic Prod-uct (GDP) levels. "Given the downward revision to the economic outlook for 2014, there are significant risks to the revenue side of the budget. In addition, our financing space is quite constrained, as we are facing large maturities on domestic T-bills and loans in 2014.

"To address these challenges, the Min-ister of Finance and Economic Develop-ment presented a package of additional revenue and expenditure measures to Cabinet in early-June 2014. "The pack-age amounts to about $933 million (6,9 percent of GDP) and places a heavier

weight on revenue measures, including $554 million (4,1 percent of GDP) from selective increases in customs duties, targeted tax compliance operations, non-tax revenues mobilised largely by redirecting surplus resources in several extra-budgetary funds, and from meas-ures to address custom revenue leak-ages," he said.

"Capital and recurrent expenditure reduction measures will amount to US$ 379 million (2,8 percent of GDP). It is important to note that we have ring-fenced high-value and high-impact social spending. As a result, we are currently targeting for total revenue of $ 4,014 million (29,8 percent of GDP), total cash expenditure of $ 4,092 million (30,4 percent of GDP), and an overall cash deficit of $78 million (0,6 percent of GDP) in 2014." Fiscal space is basi-cally the difference between the current level of public debt and the level of debt

that is sustainable and manageable, and allows a government to provide resources for a desired purpose without putting at risk the sustainability of its financial position or the stability of the economy.

The additional measures that the Gov-ernment is implementing on the whole consist of improving revenue perfor-mance and re-allocating expenditure. However, the Government could also grow its fiscal space by enhancing its potential for donor support, but if indica-tions by the Minister are anything to go by, this may be long in coming.

"(G)iven the very tight resource con-straints in the 2014 Budget, it would be very difficult for us to continue reducing the total stock of arrears of domestic payment in 2014. We plan to eliminate the total stock of end-2014 domestic arrears by end-2016," he told the IMF •

New revenue and expenditure package to add $933 million

Minister Chinamasa

BH24

3 NEWS

BH24 Reporter

Zimbabwe-focused multi-commodity resource development company, Afri-can Consolidated Resources (ACR) has said it has reached an agreement with Falcon Gold to extend the date for the payment of the outstanding balance for the sale of the latter's Dalny Mine to August 15.

The payment date had been initially set for July 30. In a recent statement, AIM-listed ACR said the extension had been necessitated by the two-week adjournment of a meeting of the Zim-babwe Stock Exchange Listing Com-mittee, and the subsequent postpone-ment of Falgold’s extraordinary general meeting.

"Further to the announcement dated 30 June 2014, ACR, the AIM-listed resources and development company, announces that Falcon Gold Zimbabwe Limited has informed the Company that, following an adjournment by two weeks of a meeting of the Zimbabwe Stock Exchange Listing Committee, the expected date of the Extraordinary

General Meeting of Falgold in order to approve the proposed sale of the Dalny Mine and associated infrastructure is now 13 August 2014, with the results expected to be published on 15 August 2014.

"In order to accommodate the new date of the Falgold EGM, Falgold has

requested and ACR has agreed to extend the date for payment of the outstanding consideration (being a net cost of $7,5 million) from 30 July 2014 to 15 August 2014," said ACR. ACR and Falgold last month signed a conditional agreement which would see ACR acquire the Dalny mine for $8,5 million.ACR also said it is continuing with "active discussions" with regards to accessing funding for its targeted key projects.

"The Company remains in active dis-cussions concerning the funding of approximately US$18 million, the funding necessary to acquire the Dalny Mine and to bring the Company's Pick-stone Peerless Gold Project in Zimba-bwe to fast tracked production, and which is anticipated to be by way of a mix of debt and equity," it said. •

ACR, Falgold agree to extend Dalny mine payment date

AdM-DI156506-

BH24

By Lynn Murahwa

Government has urged players in the country's tourism sector to develop products that are specifically targeted for the domestic market.

Speaking when she officially launched the National Tourism Policy this morn-ing, Vice President Joice Mujuru said the tourism industry in Zimbabwe will grow to the extent that players in the industry develop new products suited to the domestic market.

”To unlock the potential in domestic tourism, it is necessary for players in the sector to have a mindset change.

The private sector should, therefore, develop a broad range of tourism products to suit the domestic market,” she said. Vice President Mujuru said the new policy will lead the nation to sustainable development through the tourism sector.

"This is a significant development given that the tourism sector has been identified as one of the major drivers of economic growth under the cluster based Zim Asset. I have no doubt that this National Tourism Policy will be a compass to guide us to lay a solid foun-dation for the sustainable development of tourism in Zimbabwe," she said. She added that Government continues

to look for ways to improve the econ-omy and social equity through natural resources. "Government continues to explore ways of promoting sustainable development and social equity through the wise exploitation of our natural resources. To this extent, emphasis will be made on capacitating and empow-ering communities to provide goods and services at various levels in the tourism supply chain," she said.

She said all efforts made towards developing the tourism sector offer great opportunities for growth as the search for new potential tourism areas continues. “All these can provide us with vast opportunities for sustaina-

ble and viable tourism growth, if well branded and effectively marketed. The challenge we face is to ensure future growth. In this respect we need to identify new areas that offer great potential for tourism development,” she said.

Minister of Tourism and Hospitality Industry Walter Mzembi said there was a need to for the country to adopt an "open skies and open borders" pol-icy, which are also addressed by the National Tourism Policy. “We need to focus on destination accessibility and a recovery strategy. We need an open skies and open borders policy,” he said. •

5 NEWS

Tourism players urged to develop domestic tourism products

BH24 Reporter

The Minister of Transport and Infra-structural Development Obert Mpofu has appointed a substantive board for Air Zimbabwe.

The eight member board is chaired by Abdulman Harid who is a former Com-missioner of Taxes and the first black Comptroller and Auditor-General of

Zimbabwe. The other board members are Gift Noko, Rudo Faranisi, Luck-son Muzondo, Patience Zenda, Edwin Zvandasara, Austin Simbai Mpinyuri, and Dr Tadiwanashe Mukudzeyi Mangwengwende.

A number of the board members have survived from the interim board that was appointed in February this year.

Speaking during the appointment, Minister Mpofu tasked the new board with turning around the fortunes of the national airliner.

"Now that you are the substantive board your priority is on the following matters: Crafting and implementing a turnaround strategy for Air Zim-babwe including aircraft leasing/pro-

curement, human resources issues and debt management; expansion of both domestic and regional routes and increasing frequencies on the most profitable route," said the minister.

He also urged the board to instill a high standard of corporate governance and to ensure viability of the airline. •

Mpofu appoints substantial Air Zimbabwe board

SPECIALISTS IN DRIVESHAFTS AND PROPSHAFTS, STEERING RACKS, BALL JOINTS, DRAGLINKS, TIE ROD ENDS, CV JOINTS, TRANSMISSIONS, UNIVERSAL JOINTS, FLANGES, BEARINGS,

BUSHES, YOKES, GENERAL ENGINEERING, BELL SPARES, AIR BRAKES AND PNUEMATICS, SUPPLY AND SERVICE EXCHANGE FOR COMPLETE AXLES, ENGINES AND GEARBOXES.

NATIONAL PROPSHAFTS CENTRENo. 17033 CEDORA ROAD, P.O. BOX GT 1244,GRANITESIDE, HARARE, ZIMBABWE.Website: www.propshaftscenter.co.zwTEL: 770638-43, 086 4406 8386CELL: 0772 470665, 0712 204396, 086 44068386, 0712 749578Email: sales@nationalpropshafts.co.zw

MUTARE PROPSHAFTS CENTRE12 A RIVERSIDE DRIVE

P.O.BOX 1869, MUTARE, ZIMBABWEWebsite: www.propshaftscenter.co.zwTel: 66084, 086 4406 8385, Fax: 68597

Cell: 0712 204396, 0772 715388, 0773 782502

Email: sales@mpc.co.zw, mpc@mweb.co.zw

BELL DIFFS

COMPRESSORS UNIVERSAL JOINTS

TA 1919 PUMPS, WATER PLATES &DOUBLE BOSH PUMPS

MT643 TRANSMISSIONS

STEERING COUPLINGS

FOOT BRAKE & VALVESCENTRE BEARINGS

PROPSHAFTS SPARES

SPIDER BEARINGS

BOOSTERS

PROPSHAFT COUPLINGS

PROPSHAFTS & DRIVE SHAFTS

TRACK RODS &DRAGLINKS

BH24

7 NEWS

By Sifelani Tsiko

Smallholder farmers from six rural districts in the country will on Friday receive awards for demonstrating out-standing achievement in conserving local crop breeds and varieties critical for the survival of the country’s indige-nous food crop resources.

Farmers who will be honoured as the best stewards of agricultural biodi-versity are from Tsholotsho, Chiredzi, Goromonzi, Murehwa, Mutoko and Uzumba-Maramba-Pfungwe (UMP). Community Technology Development Organisation (CTDO) director, Andrew Mushita yesterday said the Agricultural Biodiversity Stewardship Award cer-emony which will be held at Chibika Community Seed Bank in UMP district seeks to encourage farmers to develop a greater understanding of crop diver-sity and the role it plays in improving their livelihoods particularly now when the country is facing climate change related challenges.

“We want to honour the real champi-ons and stewards of crop diversity,” he said. “The awards aim to record and

celebrate the cultural traditions asso-ciated with indigenous seed varieties that have sustained human life here for ages.” The awards, he said, will help rekindle interest in traditional foods strengthening the economic rationale for promoting crop diversity especially those that bring food security and con-servation benefits.

“The role of smallholder farmers in seed saving is a crucial part of their learning and contributes to the preservation of indigenous knowledge that supports local foods reliant on traditional breeds and varieties that bring clear and wider food security and environmental bene-

fits,” Mushita said.

“The awards recognise the hard work and efforts farmers are making to pre-serve local crop varieties.” CTDO, a local NGO, is implementing a Knowledge Management Programme on Agricul-tural Biodiversity Conservation project in selected districts of Zimbabwe.

The project aims to scale-up and strengthen practices that build on the conservation and sustainable use of agricultural-biodiversity for improved livelihoods and resilient food systems especially under the changing climatic conditions that are being experienced

in Zimbabwe.

Agricultural experts say the world’s agro-biodiversity is disappearing at an alarming rate. For several major crops, up to 80–90 percent losses in vari-ety over the past century have been reported.

Zimbabwe has lost a number of local crop varieties due to neglect, erosion of local indigenous knowledge systems, promotion of improved varieties, lack of incentives for locally adapted crops and recognition of the keepers of crop diversity among other factors.

Public health experts and agricultural-ist bemoan the erosion of indigenous vegetables such as tsunga, nyevhe, mutsine, derere rebupwe, regusha, rename, renyunje and indigenous crop varieties such as sorghum, pearl and finger millets, cowpeas, bambara nuts and other neglected and under-uti-lized crop species (NUS) such as taro and madhumbe which they argue are important in improving the nutrition of people particularly now when there is a rise in non-communicable diseases such as cancer, diabetes and others. •

Smallholder farmers to receive awards

BH24

By Stanford Chiwanga

The Minister of Industry and Com-merce Mike Bimha believes that ZimAsset will only be a success story if there are workers to drive it.

Addressing business executives at the National Aids Council (NAC) Busi-ness Conference in Bulawayo, Minister Bimha said healthy workers are needed for the economy to be turned around.

“Ladies and gentlemen, Zimbabwe can only achieve economic prosperity with a healthy workforce. The recently developed and launched ZimAsset can only succeed to set our country on a recovery path if there are workers to drive it.

“ZimAsset clearly identifies HIV and

Aids as one of its priority areas that require attention. I am therefore making an appeal to employees and employers as well as related stakehold-ers to prioritise strategies to address HIV at the workplace as a key require-ment for achieving ZimAsset,” he said.

Minister Bimha said wining the fight

against HIV and Aids was a must for ZimAsset to succeed. “It is impera-tive that we institutionalise through policies, how we conduct the various programmes on HIV and Aids at our workplaces. I understand that technical guidance on developing the required policies is available from NAC and several of its implementing partners including institutions funded by the Global Fund.

“I appeal to the mining and related sectors to get organised through asso-ciations or related groupings for better coordination. Better coordination is a prerequisite for many funders and technical support offering agencies. Come together and work in harmony with the rest of the sectors in the national response to HIV and Aids,” he said. The Minister also urged the busi-

ness sector to strive to have a health workforce.

He said: “I want to urge you as the mining sector and related sectors to be creative in your leadership towards a healthy workforce for maximum profit-ability. The business sector has unique skills to respond in a variety of ways and programmes integrating HIV and AIDS into a holistic wellness approach. The commitment of top level man-agement and company shareholders is essential and early action will reap tremendous savings in both economic and human terms.”

Minister Bimha said the Ministry of Industry and Commerce was prepared to assist companies and mines in the fight against HIV and AIDS.

“As a ministry we will be ready to work with you and assist wherever we can, fully mindful to the fact that this will have a positive effect on productivity in the mining and related sectors. I must express the gratitude of my ministry to NAC for organising this meeting and their commitment to the vision of this country and the focus of this year’s Mine Entra on innovation, beneficiation and growth,” he said.

9 NEWS

Only workers can drive ZimAsset – Bimha

Minister Bimha

BH24

The equities maintained a downward trend, dipping 0.36 percent as trading on the bourse remains depressed.

Industrial counters that traded in the red out-numbered gainers seven to three as the Industrials index shed a further 0.66 points to close at 184.95

points. Radar led the top losers, los-ing a hefty 5.98 cents to close at 2.02 cents, Hippo eased 5 cents to trade at 65 cents and TA Holdings slipped 1.51 cents to 15 cents.

Telecoms giant Econet and Meikles both traded a cent lower to close at

73 cents and 17 cents respectively.

The three counters that traded in the positive territory include Star Africa, which was up 0.20 cents to trade at 1.35 cents, ZHL which gained 0.10 cents to settle at 0.95 cents and ZPI which increased by 0.04 cents to close at 0.89 cents.

The mining index extended by 1.89 points (or 3.19 percent) to close at 61.13 points following gains in Bind-ura, which rose 0.21 cents to 5.01 cents. Falgold, Hwange and Riozim were unchanged at previous trading levels.

The total value of trades was $463K, buoyed by volume in Afdis, Delta and Bindura. ― BH24 Reporter •

11 ZSE REVIEW

Local bourse extends losses

BH24

Zimbabwe has been making rather slow progress in implementing pol-icy reforms under the International Monetary Fund's Staff-Monitored Pro-gramme (SMP).

It could be that the respective pro-cesses may have been slowed by a lengthy electoral process, but that should particularly apply to the quan-titative targets, rather than the struc-tural benchmarks.

In a letter of intent addressed to the IMF, Finance Minister Patrick Chi-namasa highlighted that the coun-try had made attained three of the five structural benchmarks for the first review and only one of the five structural benchmarks for the second review.

These include: submission of the new Income Tax Bill to Parliament in May 2013; and the time-bound action plan by the Civil Service Commission (for-merly the Public Service Commission) on measures to modernise human resource and payroll systems was submitted to the Ministry of Finance and Economic Development (MoFED)

in December 2013. Additionally, the new framework for contingency plan-ning and systemic risk management was submitted to and approved by the RBZ Board in October 2013; and the RBZ Debt Assumption Bill (formerly the RBZ Debt Relief Bill) was approved by Cabinet in November 2013 and submitted to Parliament on April 10, 2014.

Both the Zimbabwean Government and the IMF have since acknowledged that the acknowledged structural benchmarks are critical in improv-ing the country's fiscal transparency and accountability, enhancing public

financial management, and increasing financial stability.

But the realisation that one out of five structural benchmarks met for the second review is particularly worri-some because these are economic policy adjustments that require will-power more than anything else.

Policy adjustments in the right areas will go a long way in improving overall economic performance. For example, experts believe that policies that that reduce corruption and improve gov-ernance create fiscal space, hence the need to review the Banking Act

and the Mines and Minerals Act. Also, Government policies that encour-age improvements in the efficiency through which the private sector allo-cates its resources have the poten-tial to facilitate higher and effective spending in both sectors.

It's not even an issue of instituting a policy re-think. The Government is fully aware of what needs to be done and in what areas. What is simply required is expediency in the imple-mentation of what the Government has already outlined in pronounce-ments such as the last National Budget and ZimAsset, for example.

Since the beginning of the year Zim-babwe has been struggling to access funding for infrastructure projects listed under ZimAsset.

But it should be a relatively easier task to advance the reform agenda that is guided by the same development plan. The Government has on numer-ous occasions expressed its commit-ment to implementing the policies and reforms in the SMP. Actual implemen-tation is key. •

13 BH24 COMMENT

Swift implementation of policy reforms crucial

BH24

Vodacom Group Ltd, the wireless operator with the most subscribers in South Africa, said first-quarter revenue increased 4.3 percent as customers used more data outside its domestic market.

Sales rose to 18.3 billion rand ($1.7 bil-lion) in the three months through June,

the Johannesburg-based company said in a statement today. Data revenue soared 23 percent to 3.6 billion rand as active customers for the service increased 37 percent to 25.3 million.

“Data and the international businesses have once again been the largest con-tributors to growth, and the entire

business is seeing the benefit of our sustained investment program,” Chief Executive Officer Shameel Joosub said in the statement.

Vodacom, which is 65 percent owned by Vodafone Group Plc, is expanding its Internet and data services while adding small-to-medium sized business cus-

tomers to offset declining voice sales from its home market, which is being squeezed by cuts in the rates it can charge for ending calls on its network.

Vodacom shares increased 1 percent to 127.35 rand as of 10:03 a.m. in Johan-nesburg. The stock has declined 4.3 percent this year, compared with a 2.6 percent gain for its biggest competitor, MTN Group Ltd.

South Africa sales advanced 2 percent to 14.8 billion rand in the quarter even as a cut to mobile termination rates reduced incoming voice revenue by 44 percent. Vodacom is seeking approval from the country’s communications regulator to acquire Internet provider Neotel Pty Ltd. as it attempts to expand its fiber network.

International mobile data revenue increased 51 percent to 636 million rand as the company added customers in Tanzania, Mozambique, the Demo-cratic Republic of Congo and Lesotho.

The phone company’s active custom-ers increased 16 percent to 59.6 mil-lion. ― Bloomberg •

15 REGIONAL NEWS

Vodacom first-quarter sales rise on Sub-Saharan Africa data

BH24

17 DIARY OF EVENTS

The black arrow indicate level of load shedding across the country.

POWER GENERATION STATSGen Station

14 July 2014

Energy

(Megawatts)

Hwange 421 MW

Kariba 750 MW

Harare 45 MW

Munyati 29 MW

Bulawayo 0 MW

Imports 0 MW

Total 1245 MW

23 -25 July - Mine Entra, Place: Zimbabwe Inter-national Exhibition Centre, Bulawayo

24 July - OK Zimbabwe Thirteenth Annual Gen-eral Meeting Place: OKMart Functions Room, First Floor, OKMart, 30 Chiremba Road, Hillside, Time:

15:00 hours.

1 August - Sixteenth Annual General Meeting of the members of Econet Wireless Zimbabwe Limited, Place: Econet Park, 2 Old Mutare Road, Msasa, Harare, Time; 10.00am

THE BH24 DIARY

BH24

19 ZSE

ZSEMOvERS CHANGE TODAY PRICE USC SHAKERS CHANGE TODAY PRICE USC

STAR AFRICA 17.39% 1.35 RADAR -74.75% 2.02

ZIMRE 11.76% 0.95 RTG -15.38% 1.10

ZPI 4.70% 0.89 TA -9.14% 15.00

BNC 4.37% 5.01 HIPPO -7.14% 65.00

MEIKLES -5.55% 17.00

ECONET -1.35% 73.00

DELTA -0.01% 125.00

IndicesINDEx PREvIOUS TODAY MOvE CHANGE

INDUSTRIAL 185.61 184.95 -0.66 POINTS -0.36%

MINING 59.24 61.13 +1.89 POINTS +3.19%

Stocks Exchange

Previous

BH24

21 AFRICA STOCkS

Botswana 8,664.65 -11.96 -0.14% 12July

Cote dIvoire 246.37 +2.18 +0.89% 07Mar

Egypt 7,949.60 -75.68 -0.94% 06Mar

Ghana 2,354.16 -7.26 -0.31% 18June

Kenya 4,896.77 -13.83 -0.28% 21July

Malawi 12,662.47 +0.00 +0.00% 07Mar

Mauritius 2,074.51 -3.51 -0.17% 07Mar

Morocco 9,544.10 +21.01 +0.22% 07Mar

Nigeria 42,784.30 -107.52 -0.25% 21July

Rwanda 131.27 +0.00 +0.00% 24Oct

Tanzania 2,018.97 +25.40 +1.27% 07Mar

Tunisia 4,624.39 -39.32 -0.84% 07Mar

Uganda 1,503.90 +0.81 +0.05% 10Sep

Zambia 4,242.74 +14.95 +0.35% 10April

Zimbabwe 185.72 -0.21 -0.11% 21July

African stock round up Commodity Prices

Name Price

Crude Oil 1,300.91 -0.21%

Spot Gold USD/oz 1,292.63 -0.26%

Spot Silver USD/oz 19.38 -0.46%

Spot Platinum USD/oz 1,421.25 -0.33%

Spot Palladium USD/oz 798.50 -0.64%

LME Copper USD/t 6,770 -0.18%

LME Aluminium USD/t 1,780 -1.17%

LME Nickel USD/t 18,230 -1.73%

LME Lead USD/t 2,095 -1.41%

Quote of the day — "There is only one way To succeed in anyThing, and ThaT is To give iT everyThing." -vince lombardi

Globalshareholder.com

Facebook's fast-growing mobile adver-tising business helped drive a 61 per cent increase in revenue during the second quarter, beating Wall Street's financial targets and sending shares to a record-high in after-hours trading on Wednesday.

The world's No.1 social network said on Wednesday that it saw increased interest from both advertisers and from users during the second quarter, while the company's profit margins expanded.

Facebook now counts 1.5 million adver-tising customers and the company's ad business saw strong growth across all of its geographic regions, Chief Operat-ing Officer Sheryl Sandberg said in an interview.

"We're seeing our existing advertisers spend more and we're seeing new peo-ple come on to the platform," Sandberg said. Advertisement

Investors bid up shares of Facebook roughly 5 per cent to $US75.13 in after-hours trading on Wednesday, giving the internet company a roughly $US190 bil-lion valuation, putting it on par with IBM.

"It might be more expensive from a market cap perspective, but I don't think anyone was expecting this level of profitability," JMP Securities analyst Ronald Josey said.

Facebook's operating margin expanded to 48 per cent of revenue in the second quarter, up from 31 per cent in the year-ago period. Overall revenue of $US2.91 billion beat the average expectation of $US2.81 billion, according to analysts polled by Thomson Reuters I/B/E/S.

Facebook executives stressed on a con-ference call that the company planned to invest aggressively in new projects, such as the Oculus virtual reality head-set business that Facebook recently acquired for $US2 billion.

And executives reiterated past com-ments that nascent advertising efforts in video and in the Instagram photo-shar-ing app would not contribute signifi-cantly to the top line in the near term.

Nor will Facebook take the "cheap and easy" route of putting ads or payment capabilities within its Messenger app, Facebook chief executive Mark Zucker-

berg said on a conference call with ana-lysts. JMP's Josey said that the go-slow approach was not a concern for inves-tors. "There's really no rush to add them because their core business is doing so well," he said.

Facebook said it now counted 1.32 bil-lion monthly users, with roughly 63 per cent accessing the service every day.

Mobile advertising revenue grew 151 per cent year-over-year, accounting for roughly 62 per cent of Facebook's over-all ad revenue.

Facebook's newsfeed ads, which inject paid marketing messages straight into a user's stream of news and content, have ignited Facebook's revenue growth and bolstered its stock price during the past year.

Facebook posted $US791 million in net income, compared with $US333 million in the second quarter of 2013. Excluding certain items, Facebook said it earned US42 cents a share in the second quar-ter, surpassing expectations for US32 cents a share. ― Reuters •

22 INTERNATIONAL NEWS

Facebook beats Wall Street targets off mobile ad growth

By Ray Mwareya

This year alone Zimbabwe has earned a record $777 million dollars from tobacco sales mainly to China.

Some 20,000 new tobacco growers have entered the market in the last year - raising production to 250 million kg.

Tobacco has been credited with reviv-ing the rural economy in a de-industri-

alising country 80 percent unemploy-ment. And according to the country's lobby The Tobacco Industry Marketing Board, 32 percent of growers this year in Zimbabwe are women.

Flue-cured tobacco (also called Virginia tobacco) is Zimbabwe's most lucrative cash crop dwarfing maize, cotton or flowers. Tobacco sales provide 26 per-cent of the country's foreign currency earnings. But tobacco has been an

outright doom for the country's natural woodlands.

Zimbabwe along with Tanzania and Malawi produce 75 percent of all tobacco in Africa. Their high quality tobacco attracts cash rich buyers from China, Dubai, Belgium, Japan and South Africa. And Zimbabwe is now the third greatest producer in the world after Brazil and the USA.

A deforestation crisis

This story of economic progress is however is a catastrophic environmen-tal disaster for the African country - 15 percent of its natural forest has been burnt down as farmers free more land to plant tobacco. On current trends, the country will be a desert in just 35 years from now.

For a grim start, small scale farmers who make up 80 percent of the coun-try's 87 000 tobacco growers are clear-ing 5,3 million trees as they expand tobacco plots and triple their profits.

"The national rate of deforestation currently stands at more than 300 000 hectares per annum of which 15 percent is attributable to tobacco pro-duction activities", moans Zimbabwe's watchdog The Forest Commission Agency.

According to the agency, this horror means that Zimbabwe is losing wood-lands which are three times bigger than its sprawling capital city, Harare, every year.

Flue-cured tobacco is highly energy-in-tensive, requiring intense heat to dry out moisture from the crop's leaves.

23 ANALYSIS

Tobacco - Zimbabwe's forests are going up in smoke

24 ANALYSIS

Curing means circulating hot air around the crop for seven days.

This means direct disaster for natural forests as farmers lay their hands on previously protected prime forests. Water bodies are also infected and dried by pesticides as farmers protect their crop from diseases.

Zimbabwe's annual rate of deforest-ation has risen sharply from the 1,5 percent recorded in 1997, according to the United Nations Development Programme - and now stands over 20 percent higher. In the same period the number of tobacco farmers increased from 1 400 to 87 000.

The United Nations Environmental Protection Agency claims that "fuel wood scarcity, land degradation and deforestation in developing countries can be linked to tobacco farming."

Coal or wood?

The heat could be provided by coal, but so long as wood is available cheaply, or even free, for the trouble of cutting it down, it dominates the country's pro-duction.

Small scale farmers who seized swathes of plots from displaced white Zimbabwe farmers in 2000 do not

have sufficient money and will to buy coal and dry their tobacco. Coal in Zim-babwe costs a prohibitive $250 per tonne.

Moreover coal fired drying barns need electricity to circulate the heat - and Zimbabwe is chronically short of power. So firewood is the easy, but hazardous, alternative to coal.

Each small scale tobacco farmer in Zimbabwe owns 3,2 hectares of cropped land according to The African Consultancy Intelligence. A smallholder typically grows 1 400 kg of tobacco per hectare, which needs seven tonnes of firewood to cure.

To prepare tobacco for sale nearby forests are cleared and the wood stockpiled to heat and dry the crop. For example, in 2011 around 635 000 tonnes of firewood were used to cure 127 million kilograms of tobacco. According to the United Nations Envi-ronmental Protection Agency, this translates to 46 000 hectares of lost forest.

Flash floods and erosion

In Mashonaland province, commonly referred to as the 'Tobacco Belt', deforestation has laid land bare and arid, bringing flash floods, erosion and

mass displacement of wildlife.

Here farmers are draining wetlands and drying shallow wells as they extend their fields. In just two years time the province will have no forest left, fears the Consultancy African Intelligence.

Fuelled by China which bought 328 mil-lion kilograms of tobacco in 2014, the price of tobacco in Zimbabwe has shot up as high as $6 per kilogram, though prices have since fallen back.

To worsen matters, Zimbabwe farm-ers prefer tobacco to food crops like bananas, wheat or maize, which has to be sold to the government buying agency at a low fixed price. The agency can also leave farmers waiting for two years for payment.

This leaves the country on the edges of acute hunger as self-sufficiency in food is undermined.

Cut less, grow more!

Small scale farmers are not disturbed by tobacco's severe impact on the environment. The judicial fine for destroying forests in Zimbabwe is too low. Offenders only have to pay $300 no matter how large a forest burnt down. To be contunued tomorrow