Trade Focus
Allan Majuru
Devolution has become a buzzword in recent months with regards to the future of Zimbabwe’s development.
There has been an agreement across all walks of life that devolution will propel development through timeous decision-making and delegation of authority to provincial and district levels.
Political, economic and social experts agree that the exercise should be implemented without delay.
From an economic perspective, some of its dimensions include fiscal, investment, trade and administrative issues, among others.
But, how will devolution benefit local exporting businesses?
Local trade policies have often been regulated and facilitated at central Government level.
As a result, this has created various blind spots, where existing and potential exporters have been sidelined to being just spectators that are not exposed to export development roles, which can assist in reducing the country’s trade deficit.
Ease of doing export business
Local businesses have raised concerns that the regulatory environment is one of the biggest impediments to export growth and does not facilitate smooth export trade.
From 2016, ZimTrade — the national trade development and promotion organisation — together with the Ministry of Industry and Commerce and the Office of the President and Cabinet (OPC) undertook a Rapid Results Initiative, which was aimed at improving the ease of doing export business.
One of the most recurring findings across different sectors was the centralisation of permit and licence issuing offices, which was causing delays and increased costs of doing business.
Most Government agencies are headquartered in Harare and local enterprises have to travel every time they need a permit or licence, and it costs them time and money.
Such bottlenecks can be eliminated through devolution, where permit and licence issuance, where necessary, is delegated to either provincial or district governments.
For example, a business operating in Chirundu, which is the gateway to Zambia, should not travel to Harare to obtain a licence or permit to export to Zambia.
Local governments can unlock opportunities through tailor-made policy interventions that create a facilitative and convenient environment for local businesses to boost exports.
As systems are decentralised, devolution will allow more linkages between local authorities and local businesses; thus, creating strong stakeholder participation in policy formulation and decision-making.
Emerging economies such as South Africa and Brazil have built very strong systems based on devolution.
As early as 2001, Brazil had implemented economic devolution and 35 percent of the country’s municipalities had implemented fiscal incentive programmes and employment or income-generating initiatives.
Capacitation
When economic activities are delegated, the facilitative organisations have no option, but to capacitate their regional and district offices to deliver accordingly.
This will improve their productivity and ultimately boost business performance.
As most facilitative organisations have centralised operations based in Harare, local businesses often complain that requested action takes long to complete, with follow-up often slow than anticipated.
By capacitating facilitative organisations, there is reduced time between an inquiry from business and actioning; thus, creating a productive environment that support exports.
Value from natural endowments
All the country’s provinces are endowed with unique resources that have significant export potential.
Delegation of authority to provincial levels will result in improved management of resources, which, in this case, will be achieved through participation of local communities.
This will further create specialised hubs that focus on developing unique value chains in areas where they have competitive advantage.
For example, Manicaland province, especially the Eastern Highlands, can be developed into an international hub for fresh produce exports.
Mashonaland provinces are ideal for mining as well as vegetables and flowers, while Matabeleland North province has massive mineral and tourism potential.
Likewise, Masvingo and Matabeleland South have potential in beef, leather, citrus and sugar.
Midlands province has vast mineral resources and can be at the centre of the regional iron and steel value chain.
There is export potential in niche products or skills in most of the regions that decentralised governance systems will help develop.
Mopani worms can be exported from Matabeleland, Moringa from the Zambezi valley, Baobab and Marula from the lowveld, as well as arts and craft from Masvingo, have export potential.
While they are relatively small value chains, their products can be value-added, certified and exported to the high-end markets, earning the much-needed foreign currency.
Going forward
Benefits inherent in devolution can be easily unlocked if economic planning is cascaded to provincial governments.
In South Africa, each province has its own economic plan.
This allows for coordination of all relevant aspects such as policy, infrastructure, skills and education, energy and logistics, which are all key to developing a strong economy.
Without devolution, certain localised issues may be easily forgotten as focus is often on the capital city.
For example, access roads are critical for the movement of macadamia, tea and avocadoes from Chipinge, but the general focus might be on urban roads and national highways.
Further, there is need to attract investment to unlock more export opportunities.
In the case of South Africa, both trade and investment promotion are done at provincial level.
Each province profiles opportunities within its jurisdiction and actively conducts independent investment missions to promote those opportunities.
The outcomes are tailor-made investment solutions suitable for both the local people as well as the investor.
Through policy intervention, devolution will delegate decisions on economic planning and investment expenditures to all levels of government and will allow them to pursue development-tailored initiatives that are relevant to local needs.
Allan Majuru is the chief executive officer of ZimTrade.