Increase sesame forex retention threshold, Govt urged

Agriculture Specialist Writer

STAKEHOLDERS in the sesame value chain have joined calls by tobacco and horticulture players, among others, in calling for the Government to increase the foreign currency retention threshold from 75 to 100 percent in order to remain competitive and curb smuggling.

This came out during an all-sesame stakeholder consultative meeting convened by the Agricultural Marketing Authority (AMA) in Harare recently.

One of the top players in the sesame sub-sector, Sustainable Agriculture Technology (SAT), which has contracted 2 015 hectares in sesame production in Chiredzi and Mwenezi districts said the crop had potential to contribute significantly to foreign currency earnings if the Government provided incentives to exporters.

Apart from contracting, SAT also provides training and extension support to farmers with plans at an advanced stage to do aggregation and cleaning before exporting to Japan.

“Our studies show that the policy on the retention of export proceeds has significantly contributed to the smuggling of large volumes of sesame from Zimbabwe through porous borders, mainly into neighbouring Mozambique and South Africa.

“While official sesame exports from ZimTrade for the last two agricultural seasons (2022 and 2023) stand at 136 tonnes and 100 tonnes respectively, the total volume of sesame seed produced in those seasons stood at 11 803 and 23 176 tonnes individually,” he said.

Mr Masunda said increasing the retention threshold would allow exporters to trade legally and to pay thousands of smallholder sesame producers countrywide a fairer price for this commodity, which would go a long way towards boosting the official export revenues for the country. Stakeholders in the sesame value chain will soon be launching a joint appeal to the Government seeking a review of the retention threshold.

The meeting also deliberated on several issues among them preparations for the 2024 marketing season, crop validation, proposed buying model and producer pricing among others.

AMA agribusiness director Mr Jonathan Mukuruba urged sesame contractors to come up with a position paper, which they would take to relevant authorities.

He also urged players in the sesame sub-sector to pursue beneficiation so as to unlock value in one of Zimbabwe’s top cash crops.

AMA and other relevant authorities will soon ramp up surveillances to tame illegal sesame exports to neighbouring countries.

Sesame is a small, seed-bearing plant that is widely grown in the country’s small-scale farming sector, especially in low-lying areas with high temperatures. The crop is primarily grown for its seeds, which are used in various industries, including food, pharmaceuticals and cosmetics.

The Reserve Bank of Zimbabwe (RBZ) standardised foreign currency retention among all exporters.

Under Exchange Control Circular Number 05 of 2023 issued in accordance with Section 35 (1) of the Exchange Control Regulations, Statutory Instrument 109 of 1996, all authorised dealers were mandated to administer a framework for the smooth implementation of the foreign exchange policy measures announced by the Monetary Policy Committee (MPC) of the RBZ on standardisation of foreign currency receipts.

“Starting November 1, 2023, exporters will be required to surrender 25 percent of their total export receipts to the authorities. This policy dictates that exporters can retain 75 percent of their earnings for personal use, while the remaining 25 percent must be surrendered to the relevant authorities at the ruling interbank rate,” said the policy.


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