The Sunday Mail
Trade Focus
Allan Majuru
AS we enter the last quarter of the year, statistics that have been compiled so far show that Zimbabwe is witnessing an increase in exports.
A recent trade outlook assessing and comparing the countries’ exports from January to June this year indicated that the month-on-month exports have grown by 3,2 percent, while year-on-year exports recorded a 35 percent increase.
Available figures released by ZimStat show the country’s exports stood at US$2,52 billion, compared to US$1,86 billion recorded during the same period in 2020.
Although there is a huge growth, exports are still dominated by minerals, an indication that more needs to be done to grow external trade of value-added products.
Already, the National Development Strategy 1 being implemented by President Mnangagwa’s Government puts emphasis on value-addition and beneficiation, as well as exports of high-value processed goods.
To improve exports of processed goods, the Second Republic is prioritising boosting capacities of the manufacturing sector, which is critical in growing export earnings.
Further to this, trade facilitation activities are being implemented by ZimTrade, the national trade development and promotion organisation, to create strong linkages between Zimbabwean exporters and buyers from across the world.
In terms of markets, ZimTrade has identified regional marketplaces as low-hanging fruits that can make it easy to grow the nation’s exports.
Currently, ZimTrade is conducting market research in Manica province in Mozambique, to identify export opportunities for Zimbabwean products in the neighbouring country.
Mozambique is one of the
fastest-growing destination markets for Zimbabwean products and indications are that local businesses are still far
from exhausting available opportunities.
Statistics show that Zimbabwe’s exports to Mozambique have increased by around 30 percent from US$178 million in June 2020 to US$ 232 million in June 2021.
Targeting Mozambique
for exports
Zimbabwe and Mozambique enjoy favourable political relations that should be used to unlock export potential.
Further to this, the two countries have a bilateral trade agreement in place and are also signatories to the Southern Africa Development Community (SADC) Trade Protocol, which encourages trade by giving one another preferential treatment in the reduction or elimination of customs duties.
Duty and import related taxes could constitute a large percentage of the final price, giving local manufacturers a substantial advantage in terms of cost over competitors from countries that do not have similar agreements.
Looking at opportunities, Mozambique is open to foreign trade which represents a large portion of the country’s Gross Domestic Product.
This means Mozambique is already importing an array of products and services, most of which Zimbabwean manufacturers have potential to supply.
The ongoing survey is thus expected to unpack further opportunities in Manica province as well as identify buyers for Zimbabwean products and services.
A market survey conducted by ZimTrade in Maputo province last year discovered potential in sectors such as processed foods, building and construction, agricultural implements, horticulture, and services.
For example, Mozambique is heavily dependent on imports for most of its processed foods, home electricals, toiletries, detergents as well as other fast-moving consumer goods (FMCGs).
Mozambique’s FMCG sector is dominated by international brands from, for example, South Africa, Portugal, Brazil and United Arab Emirates.
This pattern is uniform across all the different categories such as processed foods, beverages, toiletries, frozen foods, and consumer electricals.
Currently most imports are from South Africa, but Zimbabwean products have opportunities especially in the central and northern regions where the prices are 20-30 percent more expensive compared to the southern provinces.
The highest population concentration is also in the northern provinces which gives even greater opportunities for consumer products.
The success of South African brands and proliferation of its retailers in Mozambique lies in the real estate investments where South African investors are constructing shopping malls in Maputo.
This is something that Zimbabwean retailers can consider so that they have solid grounding in Mozambique as the trend is that South African retailers source from South Africa first.
Further opportunities are in the agriculture sector where Zimbabwe has an advanced sector that can meet most requirements in the market.
Farming is mainly communal and subsistence and the majority do not use fertilisers and chemicals.
As the country’s economy is based on agriculture, there are opportunities to value-add on technologies as some farmers are using traditional farming methods, low-yield seed varieties and manual cultivation techniques.
Another opportunity in the sector is provision of agricultural skills and expertise as well as quality seeds.
With proper marketing, local producers can seize the market as there is currently lack of extension services, knowledge and skills.
Distribution of inputs is fragmented as the retail structures are not well established compared to other sectors.
All these challenges offer opportunities for Zimbabwean products.
Zimbabwean companies have the potential to supply products like seeds, chemicals, treated poles for fencing, tractor-drawn implements, hand tools, chemicals and fertilisers.
The seed market in the country is growing with most of the seed coming from South Africa. There are also some Zimbabwean seed houses that have set up shop in Mozambique, especially in the western districts.
There is potential for Zimbabwean companies to embark on seed production and supply the market with other seed varieties.
Since the greater part of farmers in Mozambique are based in the rural areas, hand tools (hoes, ploughs, cultivators) as well as ox-drawn implements have great potential.
In addition, the construction and engineering sector of Mozambique has vast opportunities for Zimbabwean businesses.
The current construction projects in Mozambique have created direct and indirect business opportunities with the most significant opportunities for Zimbabwean companies being supply of materials and related services.
To easily access these opportunities, Zimbabwean companies need to participate in joint tenders for building and construction.
Mozambique currently procures most of its materials from South Africa mainly because of proximity, but Zimbabwean companies also have the potential to supply products like wooden door and window frames, roofing tiles, PVC pipes, gum poles and timber.
Allan Majuru is ZimTrade chief executive officer.
