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News in depth: Zim losing billions to tobacco and cigarette smuggling by cross-border syndicates


Zimbabwe is losing billions of dollars in potential revenue due to smuggling of raw tobacco and manufactured cigarettes by well-coordinated syndicates, investigations have revealed.

It emerged that Parliament has since initiated a probe to expose and stop the massive smuggling that also involves Zimbabwean and South African registered companies.

Records perused as part of the investigation showed that Zimbabwe could be losing at least
US$5 billion annually through the export of raw tobacco, while South Africa is losing more than R19 billion to cigarette smuggling.

Meanwhile, the South African Revenue Service (SARS) is seeking to recover tax from an importer, who was recently accused of smuggling tonnes of tobacco from Zimbabwe.

Investigations have revealed that only 1.5% of Zimbabwe’s tobacco is channelled towards local processing while the remainder is exported in raw form.

Zimbabwean legislators have red-flagged the exporting process, describing it as a scandal and a form of currency externalisation, while fingering the Tobacco lndustry and Marketing Board (TIMB) and unnamed cartels, mostly of local companies operating in South Africa, for fuelling the illicit smuggling.

Agriculture parliamentary portfolio committee chairperson Justice Mayor Wadyajena could not immediately comment on the probe, but sources on his committee said there were lots of underhand dealings that they wanted to expose.

Impeccable sources say some of the local companies based in South Africa are believed to be running the cartels involved in exporting unprocessed tobacco and will soon be called for hearings by the Agriculture committee.

“Experts are telling us that the TIMB may be presiding over a number of cartels, who are externalising foreign currency,” one of the MPs told The Standard.

“Our tobacco is charged here at between US$2.50 per kilogramme and US$2.99 and is exported to South Africa where they only remove the spine then it’s sold at over US$10.50.

“Can’t we do that here in Zimbabwe?”

Ironically, South Africa is now one of the major exporters of tobacco yet it is not the biggest producer.

While South African authorities confirmed that tobacco was indeed being smuggled together with cigarettes, their Zimbabwean counterparts professed total ignorance, a sign that a lot of underhand dealings were taking place without government accounting for how much could be lost.

Agriculture minister Anxious Masuka said he was only able to comment on the matter later, but subsequent efforts to contact him were in vain.

“We cannot talk about that now,” he said curtly.

The ministry’s permanent secretary John Bhasera also professed ignorance on the issue of tobacco smuggling and referred questions to the TIMB, who are the regulators of the industry in Zimbabwe.

“You can call TIMB,” Bhasera said.

“They have the statistics as they are the regulators of the tobacco marketing industry in Zimbabwe.”

TIMB chief executive officer, Meanwell Gudu, said claims by the MPs of smuggling of raw tobacco may be misplaced.

“I don’t remember any tobacco that has been smuggled and I maintained that stance even with the parliamentary portfolio committee,” Gudu said.

“I don’t know of any tobacco that is smuggled to South Africa.

“TIMB is only responsible for regulating the unmanufactured leaf, so our mandate does not go into cigarette smuggling and I don’t know anything about cigarette smuggling.

“That is regulated by the ministry of Industry and Commerce.

“In as far as the tobacco leaf is concerned, I don’t have anything and have never heard of that because for them to export tobacco leaf they need an export license from TIMB and we only issue that after inspecting the stocks and certifying the origin and so forth.

“I have never heard of anyone, who has smuggled tobacco leaf.”

Despite the denials by the Zimbabwean government that raw tobacco is smuggled to South Africa where it is sold for a song, authorities in the neighbouring country confirmed this.

“There is massive smuggling of cigarettes and tobacco into South Africa as evidenced by regular large seizures of the contraband by law enforcement agencies in the region of the Beitbridge border,” Yusuf Abramjee, Tax Justice South Africa told The Standard during the investigations.

“This illicit activity amounts to a huge loss of revenue for the South African fiscus.

“The South African Revenue Service is seeking to recover at least R19 billion from one importer, who is accused of smuggling tonnes of tobacco from Zimbabwe that disappeared into our underground economy.”

He named a Zimbabwean cigarette brand as a leader in the illegal price war and smuggling while other brands sold at tax-evading prices were made in South Africa by licensed manufacturers, who don’t properly declare their production volumes.

He said some were members of the Fair Trade Independent Tobacco Association (FITA).

“This illicit trade deprived the SA Treasury of R19 billion in lost cigarette excise last year,” he said.

“To combat this menace, SARS must enforce production counter regulations at all cigarette factories.

“Our porous borders must be properly policed and a track-and-trace system should be imposed on all South African cigarette producers.”

ln June this year,  South Africa police arrested a local smuggler in the Eastern Cape and discovered over 1 279 boxes weighing a total of 200 kilograms of both raw and cut rag tobacco.

The contraband, like many others came through the Beitbridge border post, and was found in a warehouse in East London.

ln October, 37 suspects were arrested while attempting to smuggle 76 cardboard crates of export quality cigarettes out of the country into South Africa.

Last month, Norton MP Temba Mliswa, himself a tobacco grower, claimed of the US$2 billion that the country made out of tobacco, the government only got US$10 million.

No explanation was given by the authorities on the matter.

It emerged that buses are used to smuggle cigarettes through the Beitbridge border post.

The buses have hidden compartments that are not scanned, but are only subjected to sporadic road checks through which they easily pass after paying bribes ranging from R300 to R500, depending on the quantity of the contraband.

Investigations revealed that smugglers include small-time players who carry small loads cross the border through illegal points, while bribing officials, including soldiers on patrol along the border.

Smugglers, most of them being unemployed young runners below the age of 40, also hire small trucks and minibuses to transport bigger quantities.

“This is done at night, between midnight and 3:00 am, when most people are asleep,” one of the smugglers said.

“The runners physically carry the cigarettes in large plastic bags on their backs and cross the Limpopo River.”

Informants say that it is quite easy to bribe the soldiers on both sides of the border.

It also emerged that also involved in smuggling are teams of so-called “untouchables”, including politicians who allegedly belong to organised cigarette smuggling syndicates.

These are described by law enforcement agents as the “big people” who are also untouchable.

Investigations revealed that the demand for Zimbabwe’s tobacco and manufactured cigarettes in foreign markets has escalated, resulting in the establishment of well-organised syndicates to facilitate the illegal trade.

  • The story is published under the Voluntary Media Council of Zimbabwe Investigative Journalism Fund with support from the European Union.

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