Zim urged to be more aggressive to meet export targets
ZIMBABWE should be more aggressive in its drive to diversify the country’s export basket to meet its export growth and revenue earnings target.
The country is in the process of implementing the Export Promotion Strategy, which seeks to achieve export earnings of around US$14 billion by 2030.
In this regard, the national export promotion body, Zimtrade, says there is a need to branch out the country’s export basket, through improvements in competitiveness and broadening of the country’s export base.
Exports, apart from growing national incomes, help to drive faster economic growth, create jobs, spread risk and increase individual company profitability, among other benefits.
Limited export revenue amid a high import bill has been one of the factors exerting pressure on the domestic currency, and the high demand for foreign currency has contributed to the depreciation of the local unit.
The Southern African nation has become largely dependent on mineral exports for foreign currency earnings over the years.
Minerals and alloys accounted for just under 76 percent of the country’s total exports in 2023, followed by unprocessed tobacco at 16, 5 percent.
Analysts say this is a worrisome indicator given that Zimbabwe had 2 840 export products (in 1995) when it enjoyed a comparative advantage, but the number has since declined to 1 353.
In 1992, the country’s export product composition was quite diversified, with a top ten which included tobacco, textiles, other agricultural products, clothing, processed foods and beverages, chemicals, and leather and hides exports.
The share of manufactured exports in total (exported) merchandise rose slightly in 2019 but resumed the downtrend while the manufacturing sector accounted for 10 percent of total exports by 2023.
As it stands, if the mining sector sneezes, the entire economy catches a cold.
“Export diversification in the direction of more sophisticated products will be beneficial for Zimbabwe’s economic development. By diversifying the export portfolios, the country can potentially access a more stable revenue stream compared to concentrating on just a few products and markets.
“Countries that are commodity dependent or have a narrow export basket usually face export instability which arises from inelastic and unstable global demand. As such, export diversification is one means to alleviate these challenges.
“More diversified exports generally experience faster economic growth; therefore, variation in export diversification levels explains the observed growth differences across Africa,”said ZimTrade in its monthly communique.
Export diversification refers to the move from “traditional” to “non-traditional” exports, in the Zimbabwean case, this points to both product diversification and market diversification.
According to ZimTrade, a shift towards the development and promotion of value-added products creates a huge potential for industrial revolution within the economy and a shift from merely being an agriculture-based to an industrial economy.
Economist John Chisumo said Zimbabwe can do far more if the strategy to improve the quality and range of exports is crafted.
“Zimbabwe has great potential if we look at exports, we produce quality products and our organic horticulture products are sought for all around the world, we have to capitalise on that and grow the value and range of our exports.
“Mechanisms should however be crafted to digress from the current state of our exports which are overwhelmingly dominated by minerals, let us flip that and let maybe manufactured products dominate our export mix if we are to continue with minerals being the major exports let them be value added at least,” said Mr Chisumo.
The export promotion body has lately been implementing strategies to unlock export value of natural endowments in rural communities to support the Government’s devolution agenda.