The Sunday Mail
ZIMBABWE has been on a major diplomatic offensive over the past few years, designed to reintegrate the economy into the global sphere, following decades of isolation.
Trade Focus
Allan Majuru
The engagement and re-engagement drive championed by President Mnangagwa follows a strong realisation that Zimbabwe can benefit more from stellar relations with the rest of the world.
The Second Republic is already involved in several activities to reap economic benefits from foreign relations, as the country sets its eyes on attaining Vision 2030 goals — upper middle-income status, characterised by improved livelihoods for citizens.
Undoubtedly, the response from the international community, starting with African countries, shows that the new diplomatic approach adopted by President Mnangagwa is bearing fruit.
Recently, Mozambican President Filipe Nyusi was in Zimbabwe on a State visit aimed at further strengthening the relations between the two countries, ensuring that they “graduate from battle fields into the industries”, as articulated by President Mnangagwa.
This follows several similar engagements that have taken place with fellow African leaders to strengthen Zimbabwe’s footprint on the continent.
These engagements, and many that have taken place in the past few years, will set the country on a positive trajectory of harnessing opportunities that lie on the African continent, leveraging on the African Continental Free Trade Area (AfCFTA).
To ensure these engagements at State level culminate into engagements among businesses, ZimTrade — the national trade development and promotion organisation — has been implementing several programmes to strengthen linkages between the local industry and buyers in targeted markets across Africa.
Recently, ZimTrade concluded the first ever market survey of Nigeria, where focus was on identifying opportunities for local companies.
The survey — whose findings will be shared with local companies during a dissemination seminar scheduled for June 13, 2023 — also sought to establish best routes to the market and compliance requirements.
This column will give snippets of key findings of the market survey of Nigeria.
About Nigeria
Nigeria is a country located on the western coast of Africa and has a diverse geography, with climate ranging from arid to humid equatorial.
The Nigerian economy rebounded in 2021, growing by 3,6 percent, and this was coming on the backdrop of the country’s economy contracting by 1,8 percent in 2020.
To diversify its economy from its dependence on crude oil, which accounted for over 76 percent of total exports in 2021, Nigeria strives to build its agriculture, mining and manufacturing sectors, especially in the automotive assembly, cement, textile and clothing sub-sectors.
Nigeria’s trade with the world indicates a favourable trade balance from 2017 to 2019.
Imported products during this period included mineral fuels, machinery, cereals and plastics.
In 2017 and 2019, Nigeria’s imports from the Southern African Development Community amounted to US$0,49 billion and US$2,09 billion respectively. The source markets being mainly South Africa, Eswatini and Tanzania.
Currently, there is little trade between Zimbabwe and Nigeria, but there is room to do more. Zimbabwe’s exports to Nigeria consist mainly of tobacco and products of the milling industry.
Nigeria is signatory to the AfCFTA, the Economic Community of West African States and the African Growth and Opportunity Act trade agreements, among others.
Most-Favoured-Nation (MFN) tariffs are currently applicable for trade with Zimbabwe, pending full implementation of the AfCFTA.
Nigeria operates a top-down government-driven standards system to regulate imported products.
Opportunities for Zimbabwe can be explored in horticulture, essential oils, leather and fast-moving consumer goods (FMCGs).
FMCG
Low-hanging fruits in the sector include processed foods such as biscuits, sweets, pasta, milk, peanut butter, ice cream and sugar, which are already fetching higher prices on the market.
In addition, there is room to supply beverages, teas and hygiene products for home and industrial use. A simple scan of prices shows that most FMCGs cost more in Nigeria compared to Zimbabwe, indicating a lucrative market for companies looking to expand their revenue base. Value addition of products that are already found in abundance in Zimbabwe, such as bananas, beans and potatoes — resulting in goods like flour — will also unlock access to the market, as most formal retailers are importing to meet requirements.
To penetrate the market, Zimbabwean producers can consider establishing collaborations with Nigerian companies. This partnership involves exporting semi-processed raw materials for final processing and packaging in Nigeria.
Horticulture
Horticultural imports in the market have grown significantly in the past few years.
In 2021, imports increased, with the country importing horticultural products worth US$104,1 million.
The top-supplying country for horticulture in Nigeria is South Africa, which accounted for 44,5 percent of all imports in 2021, and this has been the case for at least the past decade.
Top products with potential for Zimbabwean farmers include blueberries, pepper, onions, sweet potato, ginger, garlic, beans, butternuts and fruits such as apples, oranges and lemons. Considering the size of the market, smallholder farmers looking to supply the market should consider joining forces so that they have enough quantities to meet minimum orders. Apart from supplying produce, there is also room to provide agricultural inputs such as seeds and chemicals, as well as implements.
Essential oils
Nigeria has a few manufacturers, who mainly process coconut oil-based cosmetic products.This gives room for other products made from natural produce found in abundance in Zimbabwe, such as baobab oil and other plant-based cosmetic products.
Services
Nigeria has a lot of building and construction projects underway.
These present opportunities for building, engineering and related services.
The growing agriculture sector in Nigeria has also created space for cooperation in areas such as extension services.
Compliance
The West African country operates a top-down government-driven standards system.
There are two primary government agencies that regulate product standards — the Standards Organisation of Nigeria (SON), the apex standardisation body in Nigeria, and the National Agency for Food and Drug Administration and Control (NAFDAC).
NAFDAC controls production, trade or sale of food, drugs, cosmetics, chemicals, detergents, medical devices and packaged water.
Standards set by SON and NAFDAC are mandatory and must be met before any product can be registered or certified and subsequently traded in Nigeria.
Allan Majuru is the Zimtrade CEO
