The Sunday Mail
Trade Focus
Allan Majuru
The current foreign policy thrust taken by President Mnangagwa, which is premised on the country being a “friend to all and enemy to none”, has set Zimbabwe on a positive path towards re-integration with the mainstream global economy.
Anchored in the economic diplomacy agenda that is being implemented by the Ministry of Foreign Affairs and International Trade, Zimbabwe has started a journey of harnessing opportunities that can be derived from excellent relations with countries around the world.
The new thrust of Zimbabwe’s diplomatic missions hinges on transactional economic diplomacy through growing exports, opening new markets and linking local businesses with potential foreign business partners.
At the recent retreat by Zimbabwean ambassadors accredited to foreign missions, President Mnangagwa said re-engagement efforts should result in better relations with the community of nations, improved foreign investment and new export markets for local products.
From this new thrust, Zimbabwe is expected to become a regional economic powerhouse following years of isolation.
The appetite for Zimbabwean products has been growing in most countries across the world.
For example, China’s imports from Zimbabwe have grown at an exponential rate over the past few years, indicating more local products could find a market in the Asian country.
The growth of Zimbabwe’s exports to China has been on the back of good political relations between the two countries.
The focus going forward is ensuring that the good political relations contribute to export growth, with emphasis on value-added products and fresh horticultural produce.
Trade Map statistics show that Zimbabwe’s exports to China have grown from US$960 000 to US$256 million over the past five years through to 2021.
The huge jump shows potential to grow exports further.
Expectations are that the number of Zimbabwean companies exporting to China will continue to grow, as ZimTrade — the country’s national trade development and promotion organisation — continues to assist local companies to register with the General Administration of China Customs (GACC).
GACC is a key border agency. It is responsible for border health checks, inspection and quarantine of imported and exported animals, plants and their products. It is also responsible for imported and exported food safety, as well as commodity inspection. Manufactures of food products across the world need to be registered with GACC upon recommendations of a competent authority in the source market, which, in this case, is ZimTrade.
This year, ZimTrade assisted nine local companies to be registered with GACC.
As eligible exporters to China, the new companies and other existing exporters will help grow the visibility of Zimbabwe-produced food products in the market.
It is important for local businesses to leverage on current products to introduce more value-added products, as well as fresh fruits and vegetables.
Understanding consumer and business dynamics will also be important.
China’s import structure
With a market of over 1,4 billion people, China is one of the biggest importers in the world.
According to Trade Map, its imports grew from around US$1,8 trillion in 2012 to US$2,7 trillion in 2021.
Some of the top imported products last year were electrical machinery and equipment; mineral fuels; mineral oils and products of their distillation; ores; slag and ash; machinery; mechanical appliances; nuclear reactors; boilers and medical equipment.
The products also included vehicles other than railway or tramway rolling stock; plastics and their articles; copper; organic chemicals; oil seeds and oleaginous fruits, as well as iron and steel.
Leading exporters to China last year were Taiwan (US$250 billion), Republic of Korea (US$213 billion), Japan (US$206 billion), the United States (US$181 billion), Australia (US$164 billion), Germany (US$120 billion), Brazil (US$110 billion) and Malaysia (US$98 billion).
Other countries that make significant exports to China are Vietnam, Russia, Indonesia, Thailand, Saudi Arabia, Chile, France, Singapore and Switzerland.
In Africa, South Africa leads top exporting African countries to China, having exported products worth US$33 billion in 2021, followed by Angola (US$21 billion), Democratic Republic of Congo (US$11,7 billion), Congo (US$4,7 billion), Zambia (US$4,4 billion) and Libya (US$3,3 billion).
Although exports from Zimbabwe to China are still to reach the billion-dollar mark, there is room to grow the presence of local products in China by focusing on areas in which the country enjoys competitive advantage.
This includes the horticulture and essential oils sectors.
Opportunities for Zimbabwe
Zimbabwe’s good climate favours the production of top-quality produce that can perform well on the Chinese market.
For example, China is looking for Zimbabwe’s citrus products and has already signed a five-year protocol to facilitate imports.
The protocol will see Zimbabwean farmers exporting fresh citrus varieties such as sweet orange (citrus sinensis), mandarin orange (citrus reticulata), grapefruit (citrus paradisi), lemon (citrus limon and citrus aurantifolia) and sour orange (citrus aurantium).
Local citrus exporters have mainly been exporting to South Africa and the European Union.
The agreement with China will, therefore, broaden export destinations for Zimbabwe’s citrus fruits.
Opportunities for Zimbabwean producers are huge.
China imported fresh and dried citrus fruits worth around US$532 million last year, of which a significant chunk was grapefruit, mandarins (including tangerines and satsumas), wilkings and similar citrus hybrids.
South Africa is currently the top exporter of citrus fruits to China, accounting for US$210 million, followed by Australia (US$86,7 million, Egypt (US$72,1 million) and the US (US$49,3 million).
Exhausting the current protocol on citrus will make it easy for Zimbabwe and China to enter into other agreements for fresh produce and fruits.
Other horticultural produce with potential includes berries, stone fruits and nuts.
China significantly grew its imports of fresh strawberries, raspberries, blackberries, back, white or red currants and gooseberries from US$1,9 billion in 2017 to US$6,4 billion in 2021.
Imports of stone fruits also went up in China, from US$899 million in 2017 to US$2,3 billion last year, while imports of nuts such as macadamia, almonds and hazelnuts grew from US$722 million to US$2,2 billion during the same period.
On the other hand, China grew its imports of fresh and dried dates, figs, pineapples, avocados, guavas, mangoes and mangosteens from US$424 million in 2017 to US$1,07 billion in 2021.
Fresh and dried bananas, including plantains, also grew from US$580 million to US$1,04 billion in the same period.
There are also huge opportunities to supply essential oils to China.
According to Trade Map, the country has grown its imports of essential oils, resinoids, perfumery, cosmetic or toilet preparations from US$7,6 billion in 2017 to US$24,1 billion in 2021.
This growth has largely been anchored in imports of beauty or make-up preparations, including preparations for skin care, whose import value grew from US$5,8 billion in 2017 to US$20,3 billion in 2021.
Essential oils used in aromatherapy such as rosemary, peppermint and sweet orange oils are some products that local farmers and businesses could consider for exporting to China.
With abundant natural resources such as indigenous fruits and spices, value addition is another way for local producers to earn more on the Chinese market.
Baobab, marula and moringa seeds, as well as mongongo nuts, provide excellent opportunities to tap into the essential oils market in China.
Allan Majuru is ZimTrade’s chief executive officer
