Export companies drop by 70 percent

Bus3Enacy Mapakame
THE number of local companies exporting their products has dropped by more than 70 percent in the past decade as capacity utilisation in industry continues to tumble, an export manufacturing survey has revealed.Only 40 percent of manufacturing companies are still exporting their products.

A local export manufacturing survey report released last week by ZimTrade shows that companies are only exporting 40 percent of their total production.

The report further notes that capacity utilisation has declined to 37 percent.

It was also proved that the engineering sector was by far the most export-oriented sub-sector with 22 percent of the firms engaged in exports.

Also, resource-based sub-sectors such as the food, beverages, tobacco, textiles and leather had more exporting firms than the resource-based sub-sector.

Speaking at the launch of the survey report, Africa Corporate Advisors managing director Mr Mike Nyamazana said the challenges faced by exporters were mainly production related rather than market related.

“The firms mentioned that they cannot export because of the challenges they are facing locally,” he said.

Mr Nyamazana tasked both the Standard Association of Zimbabwe and ZimTrade to search for alternative ways to reach out to SMEs to ensure their products and services were certified.

He also noted that there was a need to carry out annual sector-specific export surveys to gauge export levels and look at the impact of interventions put in place to increase exports.

The report further reveals that 71,4 percent of companies that were active exporters in the last 10 years have since stopped exporting.

However, imports continue to outweigh exports, yielding a huge negative trade balance.

Zimbabwe’s biggest trading partner remains South Africa, which accounts for 70 percent of total exports.
Other leading export destinations include Comesa countries such as Kenya and Malawi, which absorb more than 40 percent of the country’s exports.

Both China and the European Union take in 15 percent each of local exports, while the United States is home to 10 percent of the country’s shipments.

Experts say the red tape encountered in processing exports, including a drop in local production, is seriously affecting the country’s export potential. Also, antiquated machinery continues to affect the quality of the products.

As a result, only 42 percent of the products from the manufacturing sector were certified by the Standards Association of Zimbabwe.

989 total views, no views today

  • Ted

    Can you comment on the degree of financial innovation in Zimbabwe