ZIMBABWE needs to urgently diversify its exports as a strategy to narrow the trade deficit and widen opportunities for increased foreign currency earnings, ZimTrade chief executive officer, Mr Allan Majuru, has said.
Although imports have continued to dominate the economy over exports since dollarisation, the trend has been going down with the 2018 trade deficit closing at $2,3 billion compared to a high of $5 billion in 2011.
According to ZimStats, Zimbabwe’s exports are largely destined for South Africa, which constituted 52 percent in 2018, followed by the likes of United Arab Emirates and other regional markets. The statistics agency has indicated that the country has lost its export grip to traditional markets over the years due to a number of barriers.
In response, Government and ZimTrade have taken concrete steps under the rapid results initiative to spruce up the exportation framework so as to achieve quick wins towards formidable competitiveness. The initiative is targeted at streamlining export processes and enhancing increased capacity, said Mr Majuru.
Under the “Zimbabwe is open for business” mantra, the country has a huge opportunity to diversify its exports through harnessing value addition and beneficiation and marketing its products across the globe. For instance, Mr Majuru said the country has high export potential from products such as raw cane sugar, citrus, leather, cement, jewellery, floriculture, farm implements, beef and clothing products among others. He said there was also higher scope for exports in the services sector and revealed that ZimTrade was already working on a strategy document to guide this drive. Mr Majuru said education, tourism, construction, transport and logistics were in critical demand in other countries.
In 1992 for instance, Zimbabwe used to export more to the European Union, Japan and the United States. Official records also show that recently the country’s exports have been skewed towards raw commodities such as unprocessed minerals and agricultural products like tobacco and cotton compared to finished products like textiles, chemicals, plastic and rubber, electrical products and so forth that it used to export in the 1990s.
Mr Majuru said since 1995, there has been a general “decline in the number of products exported by Zimbabwe and also export partners”. The country has also been ranked among laggards in terms of export competitiveness in the region in which South Africa leads the pack.
The World Economic Forum 2018 report also ranks Zimbabwe number 128 in global export competitiveness out of 140 countries.
Mr Majuru said the major impediments to improved exports included a plethora of regulatory permits and associated multiplicity of levies, red tape in getting export documentation and long processing periods. These are compounded by “high production costs arising from obsolete machinery, high cost of utilities and other inputs as well as corruption,” said Mr Majuru.
ZimTrade has in the last few years undertaken studies in different markets to determine new opportunities for exports. These have covered Tete and Nampula provinces in Mozambique, Northern Namibia, Dubai, Botswana, Angola and Kenya. The country’s trade promotion and facilitation agency was one of the key organisations that participated at the Zimbabwe International Trade Fair (ZITF) in Bulawayo last week.