The Sunday Mail
Trade Focus
Allan Majuru
Economic growth and development lie not only in enhanced local production, but in international trade, and more specifically, export development and growth.
Improved international trade shares a positive correlation with better living standards, increased employment and provides consumer choice.
Exports of goods and services have become increasingly important with the advent of globalisation and promulgation of free trade.
According to World Bank statistics, global exports as a percentage of GDP (Gross Domestic Product) have been continuously increasing from 12 percent in 1960 to 29 percent in 2017.
It is imperative for Zimbabwe to actively catch on with the global trend and pursue a massive export development for the exports of value-added products, which attract more revenue and grow the country’s export figures.
Zimbabwe export growth has been gradual over the recent years with some sectors growing more significantly.
Globally, in 2018, Zimbabwe exported goods worth US$4,1 billion (excluding export of services), which was an increase from 2017 export figure of US$3,5 billion.
Comparing Zimbabwe’s exports to those of other African countries, we were ranked 21 in 2018.
South Africa was the largest exporter in Africa having exported just over US$94 billion. Other neighboring countries like Zambia, Mozambique and Botswana were ranked 13, 16 and 19 respectively.
Within SADC, Zimbabwe is at number eight out of all countries within the regional economic bloc.
During the same period, 51 percent of Zimbabwe’s exports went to South Africa, followed by the United Arab Emirates and Mozambique taking up 17 percent and 8 percent respectively. This shows lack of diversity.
Back in 1992, Zimbabwe’s exports were more diversified; South Africa taking 26 percent, followed by UK with 12 percent, USA taking 10 percent, Argentina (9 percent), Germany (7 percent), Japan (6 percent).
The 1992 position shows that a total 70 percent of Zimbabwe’s exports were shared between six countries unlike last year where 76 percent of Zimbabwe’s exports went to only three countries.
Zimbabwe’s overall export performance is largely driven by growth in raw commodities, that is, minerals and tobacco.
Mineral exports and unmanufactured tobacco constituted 75 percent of the country’s total exports during 2018, while manufactured exports contributed about 7 percent to total exports.
Additionally, exports of raw crocodile hides and skins increased by 70 percent from US$20 million in 2017 to US$33,9 million in 2018.
According to ZimStat and Ministry of Finance and Economic Development figures, during the first quarter of 2019, Zimbabwe’s exports stood at US$1,02 billion.
This was a 15 percentage increase from 2018 first quarter figures of US$886.1million. Exports during this period were mainly dominated by minerals, with gold, nickel mattes, ores and concentrates contributing 51 percent as well as tobacco which contributed 23 percent.
The processed food and beverages sector have been showing signs of great improvement and potential on the export market.
The sector reported a positive performance contributing 5 percent to total exports in February 2019 compared to a contribution of 1 percent in the same month of 2018.
In value terms the sector also realized an increase, having exported US$16,1million, compared to US$3,8 million in the same month in 2018.
The increase was mainly a result of growth in exports of cane sugar in solid form, confectionery sugar, milk, cream and juices from fruits and vegetables.
The Zimbabwe horticulture sector has been on an upward trend since 2012.
Horticulture recorded an increase in value of exports from US$51,9 million in 2017 to US$112,2 million in 2018, according to ZimStat.
This was mainly attributed to export of new products such as blueberries and raspberries.
There is also increased hectarage under citrus, macadamia and avocados.
Some of the plantations are also beginning to mature, therefore adding to our export volumes.
The sector is, however, not without its challenges and addressing these will ensure horticulture easily surpasses historical performances and becomes a multi-billion money spinner.
ZimTrade, the national trade development and promotion body, is mandated to energise Zimbabwe’s export growth, and as such, the organisation engages in programmes, which support local players in the production of the various products and services.
Specific to horticulture, ZimTrade has lined up various projects to grow the sector and has actively participated in export promotion activities to market these products across the world.
Under the long-standing memorandum of understanding (MoU) with a Netherlands based senior expert consultancy organisation, PUM, ZimTrade continuously conducts expert missions to assist horticultural farmers in various aspects.
This partnership has facilitated knowledge and skills transfer for the horticultural sector.
ZimTrade also put together a Horticulture Capacity Development project which is targeted at smallholder farmers in irrigation schemes producing niche products for export.
The project is covering seven value chains which include macadamia, pineapple, avocado, sweet potatoes, paprika, chillies, flowers and bananas.
ZimTrade also assists in facilitating exports of goods and services through provision of market intelligence and trade information engaging in programmes for development in an effort to bring products to export readiness, as well as addressing issues which affect the ease of doing export business.
For Zimbabwe to export sustainably, we need to be competitive.
Price competitiveness, through improved efficiency, is the best way to go.
Inefficient processes can lead to increased costs of doing business, which result in high product prices making them less competitive compared to other similar products from competing countries.
The introduction of the RTGS dollar also enhanced export competitiveness as it is a softer currency than the US dollar.
However, access to foreign currency is still required to facilitate the importation of raw materials, among others.
Zimbabwe is a signatory to various trade agreements, which some companies are not taking advantage of.
We need to inculcate an export culture in business and leverage on existing and upcoming trade agreements.
Often, discussions and policies on exports focus on goods and leave out services.
Services constitute the fastest growing exports globally and more companies are finding profit in export of services.
With one of the highest literacy rates in Africa, Zimbabwe has a pool of highly educated and trained professionals in various fields, such as engineering medical and commercial services, among others.
This presents a massive untapped potential which, with deliberate policies and an enabling environment, has the potential to become one of Zimbabwe’s largest export.
Allan Majuru is ZimTrade chief executive officer
