The Sunday Mail
AFRICA’s development must be driven by home-grown solutions.
Trade Focus
Allan Majuru
This is one of the key messages consistently delivered by President Mnangagwa at high-level forums across the world.
At the Africa Investment Forum last year, he emphasised the need for the continent to look inward for solutions to its challenges.
“Before we spend time addressing the perception of the outside, it is necessary for us as Africa to integrate ourselves, understand ourselves as a continent and share what we have in terms of resources,” he said.
The Second Republic has been ratcheting up engagements with fellow African countries in order to promote intra-African trade.
For a long time, African states have been trading more with countries from other continents than amongst themselves, and this is not sustainable.
Thus, the transactional diplomacy agenda, spearheaded through the Ministry of Foreign Affairs and International Trade, is transforming Zimbabwe into a strategic trade partner on the continent.
ZimTrade, the national trade development and promotion body, has strengthened and expanded trade promotion activities in Africa.
It will be facilitating over 30 local companies to participate at the third edition of the largest trade exhibition on the continent — the Intra-Africa Trade Fair — scheduled for November in Egypt.
At the fair, the companies will engage with leading distributors from across the continent.
This engagement complements ongoing programmes to create links between local exporters and buyers from Africa.
Further, on October 18, buyers from countries such as Ghana, Angola, Mozambique and the Democratic Republic of Congo will engage local firms and conduct company visits as part of the Buyers Seminar, which precedes the Annual Exporters Conference to be held on October 19 in Harare.
The buyers will engage in business-to-business meetings with suppliers of products such as fast-moving consumer goods, fresh fruits and vegetables, agricultural inputs and implements, and mining supplies.
All this puts local companies in good stead to benefit from the African Continental Free Trade Area (AfCFTA).
Africa’s single market
The AfCFTA brings together all 55 African Union member states.
It covers a market of more than 1,2 billion people with a combined gross domestic product (GDP) of US$3,4 trillion.
It is envisaged that an integrated Africa will see the volume of total exports growing by almost 29 percent by 2035.
This will make African countries more competitive and create new opportunities for manufacturers and workers, which will see around 68 million people lifted out of poverty by 2035.
For Africa to turn its economic gains into sustainable growth and shared prosperity, the African Development Bank notes that the continent’s “public and private sectors must work together to connect the continent’s markets, deepen regional integration and adopt reforms that enhance competitiveness”.
Little intra-Africa trade
Data from Trade Map shows that there has been little intra-Africa trade relative to trade with the rest of the world.
In 2022, the value of products imported by African countries from their peers was around US$81,9 billion, up from US$61,9 billion in 2020.
This is against the total import bill of US$694,5 billion for African countries, with the bulk of imports coming from other continents.
When looking at trade balance alone, it seems there is room for Africa to be self-sustaining in terms of its requirements, especially if value addition takes place within the continent.
Africa’s total exports in 2022 were US$661,4 billion, against total imports of US$694,5 billion.
As the long-term target is for the continent to be self-sustaining in meeting its requirements, it is encouraging that the value of intra-African trade has been growing.
This is expected to continue as more countries implement AfCFTA.
Top exporting African countries that supply markets on the continent are South Africa (US$28,1 billion), Egypt (US$6,4 billion), Nigeria (US$6,1 billion), Cote d’Ivoire (US$4,3 billion), Morocco (US$3,8 billion), Tanzania (US$2,5 billion) and Zambia (US$2,4 billion).
Zimbabwe can significantly grow its exports by focusing on African countries through leveraging on bilateral and multilateral trade agreements, as well as advantages related to logistics.
Regional markets have been contributing towards growing exports for countries such as South Africa, Zambia and Tanzania.
For example, according to Trade Map, leading importing markets for South African products last year were Mozambique (US$5,8 billion), Botswana (US$4,7 billion), Namibia (US$3,5 billion), Zimbabwe (US$3,2 billion) and Zambia (US$2,7 billion).
Other top importing markets for South Africa are Eswatini (US$1,6 billion), the Democratic Republic of Congo (US$1,5 billion) and Lesotho (US$1,5 billion).
Some of the top products exported by SA to countries on the continent are mineral fuels and mineral oils; iron and steel and
their articles; electrical machinery and appliances; beverages, spirits and vinegar; fertilisers; soaps and detergents; and essential oils and resinoids.
Zambia has also been growing its exports on the continent over the past years.
In 2022, it exported products worth US$3 billion, up from US$1,8 billion in 2018.
Its top exported products include sulphur; cement and lime; mineral fuels and mineral oils; copper; iron and steel; beverages; fertilisers; sugars and sugar confectionery; and soap and organic surface-active agents.
The DRC was Zambia’s biggest market, taking in goods worth US$1,6 billion in 2022, up from US$865 million in 2018.
Other top importers of Zambian products on the continent last year were South Africa (US$269 million), Zimbabwe (US$265 million) and Namibia (US$117 million).
Tanzania has also significantly grown its exports to other African countries, from US$1,07 billion in 2018 to US$2,5 billion in 2022.
Top importers of products from the East African country last year were South Africa, Kenya, the DRC, Uganda, Rwanda and Burundi.
Low-hanging fruits for local businesses
The continent-wide free trade area presents immense opportunities for local businesses to diversify their exports, as well as open better access to raw materials from the rest of Africa.
Zimbabwe enjoys favourable climatic conditions suitable for the production of a variety of plants.
Local businesses can fully use this advantage to specialise in niche products for exports.
Horticulture remains one key foreign currency earner for Zimbabwe.
It is, therefore, a low-hanging fruit for local businesses to establish and increase their market share in other countries.
Value addition for horticultural produce would also ensure local enterprises maximise on revenue, as processed products earn more than raw materials.
Zimbabwe has some of the leading value-added products such as cordials and other soft drinks that are in demand across the globe.
These could be used as key merchandise to support export growth.
Other sectors that can support growth are clothing and leather.
Zimbabwe has one of the best cotton in the world, so supporting the cotton value chain is one of the interventions needed to prepare Zimbabwe to benefit from the AfCFTA.
In addition, Zimbabwe has abundant raw hides that can be value-added through processing into various leather products.
Currently, there are eight tanneries in Zimbabwe, and these can produce leather products for exports into the region while preparing to supply the rest of the continent.
Allan Majuru is ZimTrade’s chief executive officer
