Oliver Kazunga, Senior Business Reporter
THE regional market is ripe for Zimbabwean exports and local producers need to improve the quality of their output to enhance their competitiveness.
Trade development and export promotion agency, ZimTrade’s director for operations Mr Phillip Phiri said this yesterday following a presentation of results of the Zambian market survey to business people in Bulawayo.
The survey explored several aspects and characteristics of the Zambian market and identified opportunities for possible partnerships, mainly in Lusaka and the Copperbelt.
The surveyed sites comprise areas such as Ndola, Kitwe, and Chingola. Zambia is among the top five export markets for Zimbabwe.
Mr Phiri said quality issues by local companies were a cause for concern and that this gap was a serious drawback in terms of competitiveness in the international market.
“The first thing that companies need to do is to improve their quality because one of the things that are a problem right now in terms of us being competitive in the international market is the quality of our products,” he said.
“Secondly, is the price issue, the price issue emanates from a lot of issues that start from production level.
If you have outdated equipment and processes, obviously, you incur high production costs.”
The source of raw materials, operational costs, labour and energy are some of the key factors that are negatively impacting competitiveness of Zimbabwean exporters at international level, said Mr Phiri.
He said these need to be addressed at industry level in order for local exporters to produce efficiently and competitively.
“Local exporters, before penetrating the export markets, need to understand the market that they go into through ZimTrade. Necessarily if you’re exporting for the first time, you cannot target bigger or larger markets where people that are playing there have got economies of scale,” he said.
“You need to start targeting countries such as Zambia, Malawi, Botswana and the Sadc region at large where we are enjoying free trade protocols even the Comesa countries.”
Mr Phiri said such an approach would help companies to create understanding on how to deal with international markets with leverage on competitiveness.
During his presentation earlier he challenged local exporters to take advantage of the Zambian export market by riding on cordial relations between the two states.
“We are committed to working towards a system with you as industry to basically take charge of the export market, taking lead from opportunities that are raised by the international market specifically for the neighbouring countries, which are very close to us.
“Zimbabwe and Zambia as you are aware enjoy a cordial relationship, which emanates way back and us being part of Comesa. It gives us a very good opportunity to increase our bilateral trade due to the free trade tariffs that exist between the two countries,” said Mr Phiri.
He said Zambia was generally a lucrative export market for Zimbabwe taking into account that the neighbouring nation was one of the fastest growing economies in the world with a Gross Domestic Product per capita of US$1 600.
Such statistics make Zambia, a lower middle income economy, said Mr Phiri. Zambia has a population of 17 million.
“From 2016 to 2017 as a result of falling copper prices, Zambia became a bit more on the recession side but we are glad to hear that there is now an increase in demand in copper meaning that industry in Zambia is going to be up again, and thus presenting opportunities for all of you (exporters) here today,” he said.
According to recent World Bank rankings, he said, Zambia was ranked number 87 out of 197 on the ease of doing business and thus the neighbouring export market was a low hanging fruit for Zimbabwe to tap into.
Zambia’s economy is driven by the mining sector with copper accounting for six percent of the world’s known copper reserves.
In this light, local suppliers of mining equipment, accessories and consumables could tap into the Zambian market where different mining companies such as Barrick Lumwana, First Quantum Minerals Limited, Konkola Copper Mines, Dangote Cement, and NFC Africa Mining, among others are found.
During a similar event in Harare on Wednesday, ZimTrade chief executive officer Mr Allan Majuru urged Zimbabwean companies in the fast moving consumer goods and mining supplies to also take advantage of opportunities in the Zambian export market.
Last year, Zimbabwe exports to Zambia totalled US$66 million against imports of US$177 million reflecting a trade deficit of US$111 million. Zimbabwe’s major exports to Zambia in 2018 included cane sugar, fish, tea, unprocessed tobacco, and cement. — @okazunga.