Trade Focus
Allan Majuru
THE Second Republic’s economic diplomacy, which is tailored to deepen economic co-operation with other countries, continues to bear fruit as current figures indicate the country will meet its targets.
According to the Zimbabwe National Statistics Agency (ZimStat), exports grew 31 percent during the first half of the year compared to the same period last year.
In the period, export revenue stood at US$3,3 billion compared to US$2,5 billion over the same period in 2021.
Reserve Bank of Zimbabwe (RBZ) figures also show that trade volumes are growing.
In the January-June period, service exports rose to US$176 million from US$103 million a year earlier.
Imports increased by 18 percent to US$4,1 billion from US$3,4 billion in 2021.
Although some might view growth in imports as unfavourable, it is encouraging to note that the bulk of imports have been machinery and equipment, as well as raw materials.
Overall, over the past two years, there has been a steady increase in imports of machinery and equipment, from US$382 million in 2020, US$654 million in 2021 to US$802 million this year.
Imports of raw materials have also been up, from US$280 million in 2020, US$461 million in 2021 and US$664 million in 2022.
Consequently, the trade deficit for the period under review narrowed from US$923 million in 2021 to US$772 million.
The National Export Strategy launched in 2019 envisages increasing exports of goods to US$6,3 billion and US$651 million for services.
The central bank actually projects the country’s exports to close the year at US$7,4 billion, which will be above the 2023 target set in the National Export Strategy.
These positive statistics are a result of the Second Republic’s efforts to restore the economy by focusing on increased trade, investment and international re-engagement.
ZimTrade has been intensifying activities to link exporters with markets on the continent and beyond.
The trade promotion body recently concluded a survey of Senegal, which follows other surveys conducted in Kenya and Ghana earlier this year.
The choice for these markets is guided by the need to fully exploit opportunities that have been brought by the African Continental Free Trade Area (AfCFTA), whose objective is to improve trade within the continent.
Earlier last week, ZimTrade hosted buyers from leading fresh produce and meat distributors from Dubai during an Inward Buyer Mission in Harare.
This market information, export development and export promotion activities, together with other programmes implemented by Government, have underpinned export growth during the first half of this year.
Big movers
Processed foods have been registering growth in the first half of the year owing to increased preference for local products in regional markets.
During the period under review, processed food exports rose by 31 percent from US$27,5 million in June 2021 to US$35,9 million in June 2022.
The country has resumed exports of sugar to some countries it had faced some challenges exporting to in 2021.
Manufactured tobacco exports increased from US$26,8 million in June 2021 to US$28,1 million in June 2022, translating to a 4,7 percent growth.
There are indications of sustained growth following ZimTrade’s current efforts to assist the sector to break into the Middle East market.
Exports of hides and skins further increased by 44 percent from US$7,2 million in the first half of 2021 to US$10,4 million during the same period in 2022.
Major export products were raw hides and skins.
In the building and construction sector, exports stood at US$19,5 million, marginally up from US$19,4 million in 2021.
Ceramic tiles exports increased from US$2,6 million in June 2021 to US$7,3 million in 2022.
Local products are most preferred in regional markets such as Botswana and Zambia because of their high quality.
Other sectors that also recorded an increase in exports include packaging and stationery exports, which recorded an 85 percent growth from US$4,4 million in June 2021 to US$8,2 million in June 2022.
Exports of manufactured or value-added products also increased by 17,9 percent from US$143,4 million in Jan-June 2021 to US$169,1 million in 2022.
Although exports of value-added products are on the increase, overall exports are still dominated by raw minerals, which is not sustainable in the long run.
Figures show that exports from the mining sector increased from US$2,07 billion in the first half of 2021 to US$2,73 billion during the same period this year, translating to a 32 percent growth.
Unmanufactured tobacco exports increased from US$256 million during the review period in 2021 to US$349,5 million in June 2022.
Shakers
The household and furniture sector recorded a 14,7 percent drop during the first half of this year compared to the same period last year.
Exports from the sector amounted to US$8,6 million against US$10,1 million recorded last year.
To recover from this, sector players are encouraged to increase production for regional markets, as well as pursue markets such as Democratic Republic of Congo, Rwanda, and Ghana, where there is already an appetite for imported furniture products.
What is crucial is that they should come up with unique and modern designs, especially in modular form, as these are easy to transport and save on logistics.
Clothing and textile exports marginally decreased from US$11,3 million to US$10,8 million, translating to a 4,5 percent decrease during the period under review.
Major exports in the sector were men’s or boys’ suits, ensembles, jackets, blazers and trousers.
Allan Majuru is ZimTrade’s chief executive officer.