Zim must learn from SA’s export strategy

Zimbabwe is in need of growing and diversifying its exports so that it can generate sufficient liquidity to propel the economy.

THE real challenge for Zimbabwe is how the country can come up with a proper framework aimed at driving exports. In as much we have other frameworks enunciated in the National Trade Policy, we need framework in the form of an integrated national export strategy.

Against this background, I found it fit to showcase the South African Integrated National Export Strategy (INES) so that we can draw lessons from the same.

South Africa sometime around 2014 came up with an INES which was responding to the country’s to declining exports to world share. The INES was developed with a motto:

“Excellence into Emerging & Traditional Markets: A strategic framework and action plan to grow and diversify South Africa’s exports”

To achieve these goals, the INES was built on six strategic pillars. Two of the pillars were moved last week so we will start off on pillar 3

Strategic Pillar 3: Increasing Demand for South African Goods and Services Through Market Prioritisation, Diversification and Access

One way which the TISA used was to identify opportunities through regional industrial integration and identification of new export markets through: ◆ Sustained and concerted regional growth which was identified as arguably the biggest stimulus to long-term growth in South Africa; ◆ A number of on-going and

scaled-up interventions are in the pipeline. These include: planning cross-border infrastructure; effective articulation of up- and downstream linkages in resource exploitation; and the realisation of massive construction opportunities; ◆ In order to tap into the continuing rapid progress in the regional integration drive, South Africa is working on the identification of stronger complementarities and cross-border value chains; the strengthening of existing export market research; market and product identification; and an export promotion drive built around strategic domestic manufacturers; ◆ South Africa’s participation in the BRICS provides important opportunities to build its domestic manufacturing base, enhance value-added exports, promote technology sharing, support small business development and expand trade and investment opportunities. The diversification of exports is being implemented by promoting exports on target sectors such as advanced manufacturing clothing, textiles, leather &footwear electro-technical (including software &white goods), metal fabrication, capital &rail transport, equipment, plastics, pharmaceuticals, chemicals and cosmetics services aerospace &defence agro-processing (including food/beverages &furniture), boat-building & associated services, automotives, cultural and creative industries and green industries.

In implementing this strategies under strategic pillar 3, the following action plan was developed and is being implemented: ◆ Improve Market Access for South

African Exporters; ◆ Use fully any incoming visits at Ministerial level by including trade and investment meetings with South African companies, where relevant; ◆ Strengthen collaboration with African/BRIC diplomatic missions on practical initiatives to expand two-way trade and investment; ◆ Showcase South African capabilities in targeted sectors using pavilions, missions and road shows; ◆ Build relationships and explore opportunities with major multinationals with headquarters in in the regions with a view to sourcing from South Africa; ◆ Commission a study to capture local, regional and global value chains, including services; ◆ Develop capacity and broaden the export base; ◆ Conduct export awareness seminars and capacity building workshops (with a focus on Africa/ BRICS); ◆ Collate and disseminate quality market intelligence; ◆ Enhance South Africa’s footprint on the African Continent and other emerging markets; ◆ Training and capacity building for diplomats posted in Africa; ◆ Develop information sharing platform / Interact regularly with Heads of Mission based in Africa Strategic Pillar 4: Increasing Export Capacity and Strengthening Exporter Performance Through the NEDP

Strategic pillar 4 is being implemented through NEDP, addressing constraints and action plan.

The National Exporter Development Programme (NEDP) was launched in 2013, with the aim of expanding the exporter base in South Africa and increasing exports in general but especially of those products and services that add value, and contribute to employment and the green economy.

The NEDP offers an integrated approach to developing and educating both exporters and potential exporters in order to encourage the entry of new exporters into the international market; this would take place against the backdrop of improving the industrial capacity of the country.

The NEDP avoids a “one-size-fits-all” approach and caters to existing exporters and potential exporters at different stages of development. It focuses on developing emerging exporters, especially black-and women-owned businesses. It also targets potential exporters that produce environment-friendly products.

The NEDP has been designed to address the following constraints: ◆ Good trade service infrastructure (banking, logistics, insurance, plus centuries of experience), but not price competitive and not accessible to all small enterprises. Not evenly spread e.g. thin in Free State, Northern Cape; ◆ Good expertise in many sectors and at many levels – but spread too thinly again (not enough people); ◆ Excellent business consulting firms for corporate clients – but not accessible to small enterprises; ◆ Databases all over the place, but not linked, and how accurate are they? ◆ A myriad of export training offerings, but not necessarily uniformly standard in terms of content and facilitator competence; ◆ Promotional activities tend to be ad-hoc, not part of a sustained programme; and ◆ Some foreign programmes are offered in South Africa, but they tend to be selective to specific organisations e.g. ITC. The NEDP is currently in the first phase of implementation with a focus on the following components: ◆ Enhancing the Export Culture (Export Awareness Workshops, Export Awards); ◆ Improving the provision of Information and Advice (Publications, Help Desk, Trade Portal); ◆ Developing the Global Exporter

Passport Initiative; ◆ Setting up the Institutional framework for the Export Village concept Strategic Pillar 5: Strengthening the Export Promotion Mechanisms Through Enhancing SA’s Value Proposition and Improved Sector Branding

The national export promotion agency has undertaken to provide the following services: ◆ Export support services: Exporter training, technical assistance, capacity building, including regulatory compliance, information on trade finance, logistics, customs, packaging, pricing, Promotional events and advocacy; ◆ Marketing: Trade fairs, exporter and importer missions, follow-up services offered by representatives abroad. ◆ Market research and publications: General, sector, and firm level information, such as market surveys, on-line information on export markets, publications encouraging firms to export, importer and exporter contact databases. On nation branding, the following action plan was developed and is under implementation: ◆ Strengthen collaboration between Government & private sector; ◆ Regular meetings to be convened between senior personnel from Brand SA, Proudly SA, Government, chamber movement and other leading business proponents; ◆ Create greater awareness regarding

export instruments; ◆ Conduct workshops with existing and potential exporters as well as respective trade promotion entities in the provinces; ◆ Creation of a dedicated website &allocation of personnel for disseminating information regarding the export instruments & incentives; ◆ Establish proper monitoring mechanisms; and ◆ Establishment of permanent evaluation unit to be established to gather information on export promotion activities. Strategic Pillar 6: Enhancing Exporter Incentives and Financing

Enhancing Export Incentives & Financing is being implemented through: ◆ Trade finance, export incentives and export insurance forms an integral part of the export strategy; ◆ Finance (access to, cost of finance and credit insurance) is aimed to address an important hurdle faced by exporters when developing new markets; ◆ Current suite of incentives are based on the supply side and are developmental in nature; ◆ In some cases companies that are not export ready utilise the export incentives before addressing competitiveness issues or technical export skills The action plan for the implementation of the strategic pillar 6 are as follows: ◆ On-going review &improvement

of export incentives; ◆ Financial support to new areas such as resources for product innovation, product certification as a requirement for entry into international markets; ◆ Protection of Intellectual Property in international markets; Reduce cost of export credit insurance

Monitoring and evaluation

An effective monitoring and evaluation system would be required to ensure that the targets set and the impact of the strategy is achieved. Given that the implementation of the strategy is cross-cutting the reporting of the outcomes of the M&E process disseminated annual export workshop and National Export Workshop for stakeholders to report on M&E outcomes. Together we make Zimbabwe great. ◆ Dr Mugano is an Author and Expert in Trade and Competitiveness. He is a Research Associate at Nelson Mandela Metropolitan University and a Senior Lecturer at the Zimbabwe Ezekiel Guti University. Feedback: Email: gmugano@gmail.com , Cell: +263 772 541 209. Disclaimer: This article was extracted from the South African Integrated National Export Strategy.