Exporters should leverage on Zim-Nam relations

04 Aug, 2019 - 00:08 0 Views

The Sunday Mail

Trade Focus
Allan Majuru

The recent decision to upgrade Zimbabwe-Namibia relations from a Joint Permanent Commission on Co-operation to Bi-National Commission is a positive development that local exporters should take advantage of to increase exports.

The 9th Zimbabwe-Namibia Joint Permanent Commission on Cooperation (JPCC), held in Namibia in July further strengthened relations by signing seven agreements that are targeting, among other things, smooth flow of trade between the two countries.

For example, the agreement on practical implementation of bilateral trade agreements signed by Zimbabwe Revenue Authority (Zimra) and Namibian Customs and Excise Department (NCED) will improve customs processes and further stimulate trade by reducing time goods spend on borders.

The agreement recognises that numerous procedural and practical implementation challenges have emerged over the years, thereby affecting bilateral trade between Zimbabwe and Namibia.

To deal with such challenges, the agreement stresses need for co-operation between Zimra and NCED on issues such as issuance of certificate of origin and verification of eligibility of products that qualify for preferential treatment.

The establishment of the Dry Port facility in Walvis Bay — a testimony of cordial relations between Namibia and Zimbabwe — is another opportunity for Zimbabwean exporters to easily access other markets beyond the continent.

The port, commissioned by President Emmerson Mnangagwa on 26 June, will provide Zimbabwe with a direct alternative shipping route on the side of the Atlantic Ocean for both exports to and imports from Europe, the Americas, Far East Asia and West Africa.

In turn, Zimbabwean exporters will enjoy a less costly route to the rest of the world compared to using other ports.

This port will also enhance trade with Namibia and broaden the prospects of Zimbabwean exporters to trade within the context of the African Continental Free Trade Area (AfCFTA) by promoting international trade.

Currently, trade between Zimbabwe and Namibia trade is largely covered under the Southern African Development Community (Sadc) Trade Agreement and the Zimbabwe-Namibia Preferential Trade Agreement, which offer preferential treatment of qualifying products.

Although Zimbabwe and Namibia are both in the same regional bloc, trade between the two countries has remained relatively low, with Zimbabwe’s exports to Namibia ranging between 0,12 percent to 0,15 percent of Namibia’s total imports.

In 2018, Namibia’s total import bill stood at US$5,03 billion according to Trade Map. However, Zimbabwe’s total exports to Namibia in the same year stood at US$7,66 million, against imports of US$17,96 million.

Given this trade deficit, decisions made during 9th JPCC present local exporters with an opportunity to increase exports into Namibia, whose economic activities present options to supply several products and services.

Namibia strategic geo-political location

Namibia is located in the south-west region of Africa, sharing border with Angola and Zambia in the north, South Africa in the south and Botswana in the east.

The country’s coastline covers around 1 570 kilometres (km), offering vast opportunities for fishing, tourism and other downstream economic activities.

Namibia’s population, according to the Sadc Secretariat (2018), is slightly more than 2,2 million people, and the population growth rate is 2,6 percent.

The Namibia Statistics Agency projects that the country’s population will reach 2,96 million in 2030 and 3,4 million in 2040.

Economy and export opportunities

Namibia dollar (NAD) is the official currency of Namibia and trades at par with the South African Rand, which is a legal tender in the country.

Against this background, Namibian economy remains integrated with the economy of South Africa, as the bulk of Namibia’s imports originate there.

As the market is heavily dominated by South African businesses, Zimbabwean companies must strategically position themselves for niche markets if they are to become successful.

The country’s economy, which offers opportunities for Zimbabwe to supply products and services, is built on mining, tourism, fishing, manufacturing and agriculture.

The mining industry, consisting mainly of diamond and uranium, employs more than 14 000 people.

Namibia is the fourth-largest exporter of non-fuel minerals in Africa and is fifth world’s largest producer of uranium with capacity to supply 10 percent of global output.

Other minerals produced in large quantities include lead, zinc, tin, silver and tungsten. These offer opportunities to supply capital equipment, electrical consumables, and materials used for processes that include aluminium powder, ammonia, anodes and cathode, caustic soda, coal and cobalt sulphate.

There are also opportunities in Namibia’s mining sector to export services such as engineering, surveying, instrumentation, transport, plant maintenance, environmental management and artisanal services like quantity.

Apart from exporting engineering skills, there are opportunities for Zimbabwean professionals in areas like the medical field, teaching, hospitality and catering, motor mechanics and skilled agriculture workers.

In fact, several Zimbabweans are running their own surgeries and pharmacies in the country, with others managing various hotels and lodges.

Another key economy sector for Namibia is the fishing industry, which is concentrated in Swakopmund, Walvis Bay and Luderitz.

The sector accounts for more than 16 500 jobs and is the second most important foreign-currency earner for the country.

Unique opportunities for Zimbabwean exporters are in provision of supplies for the fishery value chain.

With regards to tourism, the sector is a major industry which attracts more than a million visitors from across the world every year.

The country has extensive nature reserves, which account for 18 percent of total surface area.

The tourism sector offers opportunity in the hospitality sub-sector where supplies and services, including employment, have a high demand given the inflow of tourists.

Although arable land accounts for only 1 percent, the agricultural sector is the largest employer, accounting for 46 percent of total population.

The main farming products are beef, mutton and dairy, millet and maize, and these creates opportunities for exporters to supply farming inputs, equipment and medicines.

Namibia is classified relatively low on agricultural potential.

Thus, given Zimbabwe’s favourable climatic conditions, this presents opportunities for local enterprises to export fresh produce, which include both fresh vegetables and fruits.

Products such as fine beans, mange tout and sugar snap peas, berries, baby vegetables and chillies have potential to perform well in the Namibian market.

Whilst the governments of Zimbabwe and Namibia have a more than cordial political relationship, this is certainly not evident on trade relations.

Focus and resources should now be devoted towards trade and investment measures.

 

Allan Majuru is the chief executive officer of ZimTrade.

 

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