The Sunday Mail
Trade Focus
Allan Majuru
DEVELOPMENT and growth of exports require a well-coordinated logistical system.
The importance of a functional road and rail transport infrastructure to the attainment of Vision 2030 cannot be overemphasised, given that the strategic framework identifies Zimbabwe as “strategically positioned to provide a gateway to transnational road, rail, pipeline and air linkages for the Sadc region — land linked not land locked.”
What is critical going forward is to come up with strategic interventions that will harness the potential in border provinces such as Manicaland in linking local manufacturers to regional and international markets.
These interventions include construction of road and rail infrastructure that can make it easy to move goods to provinces that enjoy logistical advantages.
Logistical strength
Manicaland province can bank on its logistical advantages and in the process, transform the Zimbabwean economy through facilitating improved trade, attracting investment, reviving industry in that region and improving social service delivery.
First, the proximity to the Indian Ocean through Beira port, presents opportunities for a viable export industry in Manicaland, which will focus on markets in the east, such as China, India and Indonesia.
To demonstrate the unique advantages, Manicaland provincial capital city, Mutare, is around 300 kilometres by road from Beira.
In comparison to other border cities and seaports, the distance between Beitbridge and Durban is around 1 100 kilometres.
Notable products that are currently being exported through the Beira port include granite, tea, coffee, macadamia and timber.
Goods mostly exported through the port of Beira are voluminous and do not require refrigeration. Apart from the logistical advantages regarding road network, Manicaland has a healthy linkage to the rest of the country and Mozambique through the Machipanda railway network, established more than 100 years ago.
The Machipanda railway stretches about 850km connecting Bulawayo, Gweru and Kwekwe to Mozambican towns such as Manica, Chimoio, Dondo and the port of Beira.
The Machipanda railway also branches and connects the city of Mutare to Chinhoyi, Shurugwi, Masvingo and Bindura.
This railway provides cheap transport alternatives to ferry goods to the port of Beira and across Mozambique.
Such a cheap transport model has capacity to strengthen the competitiveness of locally produced commodities through reducing the landing cost.
To fully realise the logistical strengths of the region, there is a need to strengthen and capacitate borders within the province so that they can better handle cargo and reduce costs for the exporters.
In addition, there is need to rehabilitate the Mutare to Chiredzi road so that it can accommodate trucks that will be avoiding the Birchenough Bridge that has a weight limit of 15 tonnes.
There is a need to fully capacitate the Cashel Valley and Mount Selinda Border posts in Chipinge so that they have capacity to handle huge traffic, which could reduce transport costs for businesses near the border posts.
Leveraging on Mutare Dry Port
The dry port in Mutare, a joint venture between Cornelder de Moçambique and GMS Freight Company, is part of an integrated transport logistics system, which makes it convenient for local manufacturers to export across the world.
The dry port is the only container-handling park with storage and facilities for rail and road. A dry inland port can speed up the flow of trucks at the Forbes Border Post, creating a more central distribution point.
The dry port improves the movement of imports and exports, moving the time-consuming sorting and processing of containers inland, away from the congested border post.
It offers services related to importation and exportation of goods on behalf of companies around the country.
A thesis titled, “Unlocking the landlocked: Appraising the economic viability of dry ports for Zimbabwe”, by Blessing Charuka, a shipping management specialist, indicated that “dry ports located in landlocked countries, such as Zimbabwe, connected to the seaports with efficient rail, represent an economic tool for minimising maritime transport access challenges and promoting economic growth and competitiveness of landlocked countries”.
The full utilisation of Mutare’s dry port by businesses in Zimbabwe will dispense all challenges normally associated with landlocked countries, which in turn will improve market access for local businesses, particularly SMEs who often face more logistics-related challenges. It is important to note that local companies stand to benefit if the country develops strong systems of dry port, particularly around centres of production.
Currently, Government is developing protocols that will make it easy for local farmers to export horticultural produce such as citrus to China. Once in place, farmers around Manicaland should have easy access to dry port facilities, which in turn will improve their access to foreign markets through eased logistics.
Industries that can take advantage of dry port
Manicaland possesses vast potential in export industries such as horticulture, timber, processed foods, and arts and crafts.
Currently, products that are exported with meaningful values include flowers, tea, coffee, macadamia, citrus, mangoes, cotton, pineapples, sweet potatoes, honey and sugar beans.
This dynamic region produces fresh vegetables which are also exported to various international destinations. Interest has also been growing for herbs and capsicum products like paprika and chillies.
Bananas are a product common and popular across the world and Manicaland has potential to tap into a US$15,7 billion global import bill.
Given the growing exports of bananas, increased production in areas such as Chimanimani, Chiredzi, Vhumba, Chipinge and Honde Valley can guarantee the country and local communities economic gains.
According to Trade Map, Zimbabwe’s exports of bananas (including plantains) have been on an upward trend, from just US$53 000 in 2015 to US$1,06 million in 2019.
Although the leading importer of Zimbabwean bananas is South Africa, Manicaland has potential to grow banana exports to Mozambique.
A study conducted a few years ago revealed that most bananas produced by smallholder farmers in Manicaland are organic and this can be used as a strong selling point to increase exports.
However, necessary organic certification will be required, which will enable farmers to earn a premium market value.
ZimTrade — the national trade development and promotion organisation — is currently developing export clusters in Manicaland that will harness the potential in, for example, pineapple, avocado and macadamia value chains so that they can increase exports from Manicaland province.
In addition, timber grows well in the Eastern Highlands and the exotic plantations constitute the greatest proportion of timber exports by the country.
Most of the timber exported from Manicaland is used in electrification and construction as well as fencing projects.
Timber accounted for more than US$18 million in 2019 and the main export destinations are Botswana, Zambia, South Africa, Malawi and Mozambique.
Zimbabwe exports timber products to Australia, Norway, Israel and the United Kingdom and these can be exported straight from the production area (Manicaland) through the Forbes Border Post to Beira for shipment to these destinations.
Value-addition hub
Due to its vast abundant flora and fauna, there is potential to set up export-focused value-addition plants in Manicaland, which can potentially improve competitiveness by reducing cost of transportation from source to processing plant.
For example, setting up an avocado oil plant in Chipinge will reduce the amount of post-harvest losses from the fruit through exporting the by-product. The setting up of a macadamia value addition plant in Chipinge will realise three times the forex generated from exporting macadamia as nuts in shell.
The value-added products can be transported to the various export destinations as Mutare is connected through an extensive rail connection system to Zambia, Mozambique, South Africa, Botswana and DRC.
In addition, the operationalisation of the diamond polishing plant in Manicaland will result in increased export proceeds for the country. Value addition to the various products will create more jobs, increase revenue generation by farmers and producers as well as increase forex generation by the country.
Close ties with Mozambique
Considering the good political relations between Mozambique and Zimbabwe, Mutare can help foster trade relations between the two nations and help improve Zimbabwe’s exports to Mozambique and beyond.
Local companies can take advantage of the Preferential Bilateral Trade Agreement between Zimbabwe and Mozambique, whose objective is to eliminate tariff and non-tariff barriers and also to co-operate in customs and trade promotion. The agreement provides for duty free trade between the two members with the rules of origin specifying a 25 percent domestic value added.
Both Zimbabwe and Mozambique are signatories to the Southern Africa Development Community (Sadc) Trade Protocol, which stimulates and encourages trade by giving one another preferential treatment in the reduction or elimination of customs duties.
In 2019, according to Trade Map, Zimbabwe’s exports to Mozambique amounted to US$354,3 million against imports of US$90 million. The exports consisted of US$94 million worth of processed foods, building and construction for US$48,5 million, and agricultural inputs and implements worth US$23,6 million.
Zimbabwe’s exports of value-added goods to Mozambique were dominated by sugar and sugar confectionery, tea and coffee, paper and packaging as well as timber.
Timber grows well in the Eastern Highlands and the exotic plantations constitute the greatest proportion of timber exports by the country.
Allan Majuru is ZimTrade chief executive.
