President Lazarus Chakwera has directed the Ministry of Agriculture to begin consultations and embark on a “radical search” for a basket of alternative crops that should replace tobacco by 2030.
The President said this in his State of the Nation Address (Sona) in Lilongwe yesterday to mark the official opening of the 3rd meeting in the 49th Session of Parliament and the 2021/22 National Budget Session.
Chakwera said the inconvenient truth about the tobacco industry in Malawi and beyond is that while the crop remains the country’s main foreign exchange earner and the largest single crop contributor to the country’s gross domestic product (GDP), such reliance is now threatened by declining demand worldwide.
He said: “In fact, this year we anticipate to earn below $200 million. This is enough evidence to make us think twice about our economic reliance on tobacco.”
The projected revenue from tobacco this year is way below the $400 million average that government realised previously.
In 2008, for example, government earned about $401 million from tobacco while in 2009, the figure went down to $366.2 million. In 2010, the country earned $342 million while in 2011, $235 million was realised.
In 2012, Malawi witnessed one of the worst tobacco seasons as it earned only $132 million due to recurring market suspensions and poor tobacco prices.
However, the plan by the Tonse government to wean the country from tobacco dependence puts at stake the immediate benefits that the country has been accruing from the crop which has been employing 12 percent of Malawi’s population while contributing 13 percent to the country’s GDP.
Besides, without a tangible alternative at the moment, the country still relies heavily on the green gold when it comes to contribution to the country’s foreign exchange buffer, apart from its estimated 25 percent contribution to government’s tax revenue base.
Chakwera also proposed a review of the Tobacco Industry Act of 2019 to sustain the industry a little longer as the country manages its exit from reliance on tobacco.
Reacting to the planned change in policy direction on tobacco, Tama Farmers Trust chief executive officer Nixon Lita yesterday said the trust has already gone flat out in preparing its member growers after noting the strong campaign championed by the World Health Organisation’s Framework Convention on Tobacco Control.
He said: “It is our hope that problems relating to un-structured and un-reliable markets associated with most non-tobacco crops will be worked on soon.”
On her part, National Association of Smallholder Farmers of Malawi chief executive officer Betty Chinyamunyamu yesterday said the country “does not have a choice when we consider global trends”.
Commenting on the issue, Alliance One Tobacco (Malawi) Limited’s Fran Malila said the company agrees with the policy direction as stated by Chakwera, but the country has to look at how best to diversify into other value chains