The Sunday Mail
Trade Focus
Allan Majuru
Zimbabwe’s trade performance in the first quarter showed a significant decline in the country’s trade deficit.
According to Zimstat, the trade deficit narrowed by 71 percent from US$805 million recorded between February and April 2018 to US$231 million in the same period in 2019.
The total import bill stood at US$1,2 billion, a 35 percent decrease from the US$1,8 billion recorded during the same period last year.
The horticulture sector’s contribution to total exports decreased from 2 percent in 2018 to 1,5 percent in 2019, with the aggregate value of exports decreasing from US$19,5 million between February and April 2018 to US$13,5 million over the comparative period in 2019.
Meanwhile, the country’s exports for the period under review marginally declined by 4 percent to U$922 million from US$964 million recorded in the same period in 2018.
South Africa remains the largest market for Zimbabwean products, taking 47 percent of total exports, followed by United Arab Emirates (20 percent), Mozambique (9 percent), Belgium (2 percent), Zambia (2 percent), Kenya (1 percent) and Botswana (1 percent).
The exports were predominantly commodities and raw materials.
The decline was mainly due to a drop in exports of leguminous vegetables, nuts (whether fresh or dried), citrus fruits and tea.
The decrease was also attributed to several constraints that have impacted negatively on the competitiveness of the sector, mainly lack of foreign currency and climate change (Cyclone Idai).
ZimTrade, the country’s trade development and promotion organisation, has put forward different projects to ensure there is diversification of horticultural products for export projects.
For example, the Best Model Farm seeks to further develop production as well as improve quality and diversification of export products through the development of robust out-grower schemes that involve small-scale farmers in Mashonaland East, Mashonaland West and Midlands.
Partnerships with expert organisations such as PUM from the Netherlands have assisted by conducting expert missions targeted at horticulture farmers.
A beneficiary of ZimTrade’s PUM initiative, Mr Noel Muwani from Owami Agriculture said, “We were having challenges balancing our product diversification drive and the development of our out-grower scheme. With the help of Dr Van’t Klooster from PUM, we are now setting up a new blueberry export operation.”
The processed foods and beverages sector continued to record a positive performance, with the sector’s contribution to total exports increasing from 1,1percent between February and April 2018 to 3,3 percent during the same period in 2019.
The value of exports in this sector recorded a sharp increase from US$10 million in 2018 to US$30 million in 2019.
The increase was attributed to the significant jump in exports of cane sugar in solid form from US$2 million in 2018 to US$20 million in 2019.
The export of products not previously exported in 2018, take for instance cheese curd, also contributed to the growth of exports in this sector. And the major markets for the products were South Africa, Zambia, Mozambique and Botswana.
The clothing and textiles sector recorded a marginal increase from 0,9 percent in 2018 to 1 percent in 2019 and the increase was attributed to the growth in exports of footwear with rubber, plastics and leather soles, woven fabrics of cotton, cotton yarn, tarpaulins, waterproof footwear and babies’ garments.
However, there has been a significant decline in raw hides and skin exports, and this is because the sector faces several challenges such as the limited stock of commercially managed beef herd.
Beef slaughter cattle are being sourced from communal areas where cattle are raised for on-farm uses and usually raw hides from such are often damaged over time, hence unsuitable for export.
Since 2016, the sector has received a lot of technical intervention support from PUM and has equipped local tanners with ideas on how to improve the sector’s value chains and production processes.
Through this partnership, a workshop was organised recently with the objective of equipping tanneries with knowledge on current trends and best practice, as well as to equip them with modern waste management techniques.
Manufactured tobacco’s contribution to exports significantly increased from 0,6 percent in 2018 to 1,2 percent in 2019.
In addition, unmanufactured tobacco exports increased from US$117 million in 2018 to US$123 million in 2019, with the major markets for the product being China, South Africa, Britain, United Arab Emirates and Belgium.
Imports
In the period under review, the major source (import) markets were South Africa (36 percent), Singapore (29 percent) and China (9 percent).
Some of the import products in the period under review included diesel (19 percent), unleaded petrol (9 percent), crude soya bean oil (2 percent), medicaments (1 percent) and wheat (1 percent), among others.
Raw materials’ imports decreased from 14 percent recorded between February and April 2018 to 11 percent during the same period in 2019.
The raw materials imports included crude soya bean oil, wheat, cyanides, vitamin additives, soya bean oil cake, ammonium nitrate, insecticides, polyethylene and polypropylene in their primary forms, among others.
The decrease is mainly attributed to foreign currency shortages.
Zimbabwe’s trade imbalance has a direct negative impact on the fiscus. Therefore, there is need for collective action to improve exports.
ZimTrade is committed to assist local companies and SMEs to develop and promote their products for the export market through expert interventions, facilitating participation at international trade shows, advocacy and market intelligence.
