The Sunday Mail
Trade Focus
Allan Majuru
ZIMBABWE’s export development agenda seeks to grow exports by penetrating new markets as well as unlocking access to previous markets for local products.
This is part of President Mnangagwa’s re-engagement drive, where the country is integrating into the global family of nations following years of isolation.
In line with aspirations of Vision 2030, the Second Republic, through the National Development Strategy 1 (NDS1), has committed to accelerate engagement and re-engagement.
The target is to position local products at the centre of all lucrative markets, new and old.
Although new markets present lucrative opportunities, there are a lot of low-hanging fruits in countries that were previously Zimbabwe’s major trading partners.
The United Kingdom (UK) is one such country.
In May this year, ZimTrade — the national trade development and promotion organisation – conducted a market survey to identify key export opportunities in the UK.
The findings, which will be unpacked during a market dissemination seminar slated for July 12, revealed that local companies have an opportunity to supply an array of products in sectors such as processed foods, agriculture and horticulture, and arts and crafts.
Understanding UK market
UK is considered the third most populated country in Europe after Russia and Germany.
The country’s GDP in 2020 was estimated at US$2,7 trillion.
It is a highly competitive and lucrative market.
UK’s economy is undergoing a historic realignment as the decision to leave the EU required the country to re-establish itself as an independent economy while at the same time dealing with effects of Covid-19.
The transition following BREXIT has made the UK more self-reliant as the country is capitalising on opportunities and promoting global interests.
The market imports across the world, with major products sourced in UK including fresh produce (flowers, vegetables, fruits), processed foods, arts and crafts (accessories and visual arts), clothing, equipment and accessories, and vehicles, among others.
Its major imports are from China, Germany, Netherlands and the US.
Zimbabwean companies have a chance to be leading suppliers by focusing on areas the country enjoys competitive and comparative advantage.
These include horticulture, processed foods, arts and crafts, and services, with special focus on the labour market.
Considering the Eastern Southern Africa Economic Partnership Agreement (UK-ESA-EPA) currently in place, there is now a direct route to market Zimbabwean products, as local exporters will continue to enjoy tariff and quota-free access in the UK.
Zimbabwe-UK trade
In the past 20 years, Zimbabwe has been successfully exporting to the UK and this indicates there is potential to regain lost market share and increase exports.
In 2021, according to the Zimbabwe National Statistics Agency (ZimStat), exports from Zimbabwe to UK stood at US$14 million.
Over the past few years, there has been a Covid-19-induced drop in exports, which saw shipments decline by 86,2 percent from US$103 million in 2017 to US$14 million in 2021.
This is largely because Zimbabwe’s exports to UK have been largely horticultural produce such as flowers, whose demand fell drastically following lockdown measures announced between 2020 and 2021.
However, indications are that exports will grow as demand for local organic foods has increased.
Consumers are increasingly looking for healthier products.
Horticulture
Zimbabwean companies have a presence in the UK, supplying fresh fruits and vegetables, tea and nuts, among others.
The products with greatest export potential from Zimbabwe to UK are peas, tea, green beans, chilli peppers, avocados and passion fruit.
Demand has also been growing for blueberries, macadamia, citrus, flowers, sweet potatoes and groundnuts.
UK imports approximately 60 percent of horticultural produce and up to 90 percent of flowers mainly through Netherlands.
Quite a large number of Zimbabwean flowers are reaching the market through Netherlands, where they are processed and packaged.
In terms of market access, consistent supply has become increasingly important for fresh produce and there is need for Zimbabwean producers to create all-year-round supply.
In addition, major retailers such as Tesco, Sainsburys and Marks and Spencer require Global Gap Certification, and exporters targeting chain stores must ensure they comply.
However, some wholesalers are not as strict and might not require Global Gap certification and these may provide an entry point for small producers.
What is important to note is importers who are strict in terms of compliance and standards tend to offer better prices.
Essential oils and other niche products
Consumer dynamics are shifting towards healthier produce plus more organic products.
Some niche products on demand include crushed chillies, cleaned and packed garlic, fried onions and mixed-coloured peppers.
There is a growing demand for super foods and carrier oils such as baobab powder, marula fruits, baobab oil, marula oil and other edible oils.
Processed foods
The UK’s processed foods sector is dominated by international brands and there are retail supermarkets in London and Birmingham that are already distributing Zimbabwean products.
These could be used as an entry point for producers who do not have direct link to major wholesalers and retailers.
Low-hanging fruits include confectioneries, cordials, long-life milk, powdered milk, chips, tinned foods, processed meats, corn snacks and dairy fruit blends.
Already, products such as Mazowe Orange Crush and Tanganda Tea have carved a niche in the market and can be used as a springboard to supply new products to the UK.
It is important for Zimbabwean companies to be innovative and work on product quality as well as market penetration strategies.
Arts and Crafts
Demand for arts and crafts from Africa is moderately high.
Products made in Africa have a rich and diverse culture embraced around the world.
Zimbabwe is already known as one of the best producers of stone sculptures and there is room to grow exports into UK, including products such as baskets, mats and sculptures made from recycled materials.
And UK has a large number of Zimbabweans living there.
This presents a greater potential for creating linkages between local suppliers and buyers.
Members of the Diaspora can become marketing agencies for domestic companies and this is a powerful conduit through which they can continuously help develop local businesses.
It is easy for Zimbabwe’s Diaspora to assume these roles given the existing social ties with businesses and families back home.
Allan Majuru is ZimTrade’s CEO
