Zimbabwe’s once vibrant beef export industry is long gone, but the potential still exists to reorganise this big export earner.
For most beef-producing provinces of Zimbabwe, commercial beef sales once accounted for about 80% of income. At its peak, post-independence in the late 1980s, the country used to export beef worth over US$35 million, with an annual beef quota to the European market of 9,100 tonnes. In current terms, this would translate to about US$400 million, had the industry remained vibrant.
This would have meant that beef’s contribution to the economy would be at par with tobacco, which contributes about US$500 million annually. However, this has not been the case. By 2000, the beef industry had all but crumbled. To date, there is virtually no or significant recorded exports of beef from Zimbabwe.
So how did we get to this point?
The emergence of South African retailers, and high beef prices in Zimbabwe, has led to a substitution effect of beef with cheaper white meat, especially poultry cuts from neighbouring South Africa and other markets. In cattle country such as Zimbabwe, the beef industry should be thriving, given that Zimbabwe has agro-ecological regions that are better suited for cattle ranching.
The production system in Zimbabwe gives the country a natural niche market potential for grass-fed and organic beef. This beef fetches a premium in export markets such as the European Union, China, and the United Arab Emirates.
In early 1990s, drought, disease outbreaks, and austerity measures affected the beef industry. Furthermore, the land reform programme which commenced from the late 1990s disrupted all farming activities and led to the depletion of the national herd and the collapse of the beef export industry.
Quality and supply inconsistencies have thus become the order of the day.
The lack of public support services for long-term investment, given the insecurity of land tenure and the deficiencies of disease control systems leading to outbreaks, worsened the situation. Outbreaks of foot-and-mouth disease (FMD) and bovine spongiform encephalopathy (BSE) have triggered import bans, which in turn have decimated beef exports from Zimbabwe.
An industry that was once dominated by commercial farmers has seen smallholder farmers becoming the main suppliers of Zimbabwe’s beef industry post-2000. Our in-house statistical estimate has smallholder farmers accounting for about 90% of the national herd, with emerging commercial and fully commercial farmers representing a combined 10% of the cattle population.
Commercial farmers that have emerged since 2000 have struggled to make meaningful contributions to the beef industry. This has largely been due to a lack of capital and appropriate infrastructure. Absentee farmers, whose primary interest and expertise is not cattle ranching, have not made the situation any better.
The best time to fix your roof is when the sun is shining
There is no doubt that there will always be a market for beef. The question is, how big will the market be? The industry has a choice between controlling its own destiny and apathy to the threat that confronts it.
In my view, Zimbabwe’s beef sector is at a “fork in the road” and has two options.
Firstly, the sector can continue with the business-as-usual approach and live in the remnants of past glory. Secondly the sector can reorganise and reinvigorate itself, so that it again becomes a leading beef producer in the Southern African region. The significance and potential of Zimbabwe’s beef production capacity strongly indicates to the sector to follow the second option.
The second option is plausible, as seen by the renewed interest from both government and the private sector to resuscitate the ailing industry. The target should however be export-standard production with target markets going beyond the Zimbabwean borders.
Broken: Time to reinvest in infrastructure
As a starting point, the country would need to make concerted efforts to invest in infrastructure, both hard and soft, while providing public support and creating certainty in the market to attract investors.
Indeed, Zimbabwe’s infrastructure is old and dilapidated, but functional. With a bit of stimulus in the form of financial injections for recapitalisation and investment, the beef sector can boost Zimbabwe’s economic recovery, thus creating much-needed employment and poverty reduction.
"...a value chain is as good as its weakest link..."
Furthermore, there needs to be a concerted effort by industry players, across the value chain, to coordinate and ensure that linkages in the value chain are strengthened to enhance competitiveness.
This is because a value chain is as good as its weakest link. Achieving competitiveness objectives within the beef value chain will also require a great deal of innovation, entrepreneurship, and learning – including farmer training and education – by actors throughout the value chain. There is a need for key players to identify market signals and opportunities, while also translating these into business models that ensure efficiency across the value chain.
AfCFTA: Can this be the way back?
Tapping into the export market after such a long hiatus means that the process will not be easy. Long-term investments are a necessity at this point. There is, however, an opportunity for Zimbabwe to use the African Continental Free Trade Area (AfCFTA) as the conduit for re-entry into the beef global market.
African countries agreed to establish a continental free trade area which became operational on the 1st of January 2021. The AfCFTA, if fully implemented provides for immediate elimination of 90% of existing tariffs, with additional 10% designated ‘sensitive’ being removed at a later stage.
Low hanging fruits are closer to home in markets such as Mozambique, the Democratic Republic of Congo (DRC) and Angola.
Beyond Southern Africa, Zimbabwe through the AfCFTA can penetrate markets in the North, such as Egypt, where there is a huge demand for quality premium beef. By starting with markets closer to home, Zimbabwe can gain the experience necessary to minimise risks and loss when it starts to venture into highly competitive and more stringent markets in Asia, Middle East, and the traditional markets of the EU.
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Taku Fundira is a market intelligence specialist with more than 15 years of experience working in East and Southern Africa.
Key specialty areas include Quantitative Economic Analysis; International Trade Policy; and Market Research with a special focus on agriculture; mining, energy, finance and FMCG industries. He is currently Head of Market Research & Export Development at Nurture Capital (Pty) Ltd (email: taku.f@nurtureinvest.com).
