Mozambique is a lucrative market for Zim

23 Jun, 2024 - 00:06 0 Views
Mozambique is a lucrative market for Zim Allan Majuru

The Sunday Mail

Trade Focus

Allan Majuru

ZIMBABWE has been growing the visibility of its products in regional markets.

As part of the economic diplomacy agenda, President Mnangagwa has tasked Zimbabwe’s diplomatic missions to unlock economic value from the country’s foreign relations.

Supported by deepened efforts by ZimTrade — the national trade development and promotion agency — to create stronger linkages between local businesses and leading buyers in regional markets, local products are gaining traction in neighbouring countries.

Efforts are underway to ensure buyers consider Zimbabwe as a preferred source market, riding on the quality of local products, which are often considered better than what competitors offer.

This has been paying off.

For example, Zimbabwe continues to make gains in Mozambique, with exports to the market growing by 80,7 percent between January and April this year, compared to the same period last year.

Figures from the Zimbabwe National Statistics Agency show that exports to Mozambique in the review period grew from US$106,4 million last year to US$192,2 million this year.

This growth comes on the back of renewed interest by the Second Republic to translate stellar relations with regional countries into material economic gains.

To complement the efforts, ZimTrade has organised export promotion events over the past few years.

These have been instrumental in bridging the gap between the private sectors in the two countries.  For example, ZimTrade — with support from the Ministry of Foreign Affairs and International Trade — recently organised the Outward Seller Mission to Tete province of Mozambique.

Discussions there focused on the growing appetite for Zimbabwean products.

ZimTrade is also facilitating attendance by local companies at this year’s edition of the Mozambique International Trade Fair, which is expected to further boost trade between the two countries.

Imports

Examining Mozambique’s import structure to identify new opportunities is, therefore, critical.

Figures on Trade Map show that imports into Mozambique have doubled in the past few years, from US$6,8 billion in 2018 to US$14,5 billion in 2022.

Major imported products in 2022 were ships, boats and floating structures (US$4,68 billion); mineral fuels, mineral oils and products of their distillation (US$2,62 billion); nuclear reactors, boilers, machinery and mechanical appliances (US$786,7 million).

Other top imported products were cereals (US$622,5 million); vehicles other than railway or tramway rolling stock and their accessories (US$613,7 million); inorganic chemicals (US$560,6 million); electrical machinery and equipment and parts thereof (US$538,6 million).

Significant imports also came from electrical machinery and equipment, and parts thereof; animal, vegetable or microbial fats and oils and their cleavage products; pharmaceutical products; articles of iron or steel; plastics and articles thereof; and iron and steel.

In addition, a significant value in imports came from fertilisers; miscellaneous chemical products; optical, photographic and cinematographic items; medical or surgical instruments and apparatus, as well as accessories; and other made-up textile articles.

Other products growing in import value in Mozambique over the past few years are railway or tramway locomotives; rubber and articles thereof; fish and crustaceans; paper and paperboard; beverages, spirits and vinegar; and ceramic products.

In terms of source markets, most products in 2022 came from the Republic of Korea (US$4,7 billion); South Africa (US$2,19 billion); the United Arab Emirates (UAE) (US$1,46 billion); China (US$1,06 billion); India (US$831,4 million) and Singapore (US$697,3 million).

Other top exporters with import values between US$100 million and US$280 million were Portugal, Saudi Arabia, Australia, Japan, the United States, Switzerland, Malaysia, Mauritius, Argentina and Thailand.

Opportunities

A market survey by ZimTrade in Mozambique identified potential in processed foods, building and construction, agricultural inputs and implements, horticulture and services.

Mozambique relies heavily on imports for processed foods, home electronic gadgets, toiletries, detergents and other fast-moving consumer goods (FMCG) categories.

The country’s FMCG sector is dominated by brands from South Africa, Portugal, Brazil and the UAE. This trend is consistent across various categories, including processed foods, beverages, toiletries, frozen foods and consumer electronic gadgets.

Although most imports currently come from South Africa, local products can find a niche in the middle and northern provinces, where prices are 20-30 percent higher than in the southern provinces.

The northern provinces, with the highest population concentration, offer even more significant opportunities for consumer products. There are further opportunities in the agriculture sector, where Zimbabwe’s advanced industry can meet many market needs. Farming in Mozambique is mostly communal and subsistence, with limited use of fertilisers and chemicals.

Given the agricultural foundation of Mozambique’s economy, there is potential to enhance productivity with new technologies, as many farmers use traditional methods, low-yield seed and manual cultivation techniques. Providing agricultural skills, expertise and quality seed also presents significant opportunities.

With effective marketing, local producers can capture the market, as there are gaps in extension services and agricultural knowledge. Zimbabwean companies can supply items such as seed, chemicals, treated fencing poles, tractor-drawn implements, hand tools and fertilisers.

Mozambique’s growing seed market is currently supplied mainly by South Africa, though some Zimbabwean seed companies have established themselves in the western districts. There is potential for Zimbabwean firms to produce and supply a variety of seed to the market.

Since most Mozambican farmers are in rural areas, hand tools (hoes, ploughs and cultivators) and ox-drawn implements have strong market potential.

Additionally, Mozambique’s construction and engineering sectors offer numerous opportunities for local businesses.

Ongoing construction projects in Mozambique create direct and indirect business opportunities, particularly in supplying materials and related services.

Zimbabwean companies can better access these opportunities by participating in joint tenders for building and construction projects.

Allan Majuru is the chief executive officer of ZimTrade.

 

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