AGRIBUSINES PER­SPEC­TIVE: Zim­babwe and SA could ben­e­fit from im­port sub­sti­tu­tion

Farmer's Weekly (South Africa) - - Contents -

The spirit of po­lit­i­cal change is sweep­ing across the streets of Zim­babwe, al­beit to­gether with lin­ger­ing eco­nomic un­der­per­for­mance. It is there­fore worth look­ing at which agri­cul­tural prod­ucts Zim­babwe im­ports in large quan­ti­ties and whether im­port sub­sti­tu­tion would be a pos­si­bil­ity in the short to medium term.

Im­port sub­sti­tu­tion would not only im­prove the coun­try’s trade bal­ance, but also bring much-needed job op­por­tu­ni­ties. In 2016, Zim­babwe spent US$1,04 bil­lion (about R15 bil­lion) on agri­cul­tural and food im­ports, up 5% from the pre­vi­ous year. Ac­cord­ing to data from Trade Map, nearly a third of this im­port bill was due to maize im­ports, with soya bean oil and rice ac­count­ing for 12% and 11% of the over­all im­port bill, re­spec­tively.

The other no­table prod­ucts the coun­try im­ported in­cluded wheat, milk, palm oil, sugar, an­i­mal and veg­etable oils, pasta and bot­tled wa­ter, among other com­modi­ties.

In the case of rice, Zim­babwe’s re­liance on im­ports is not a unique phe­nom­e­non, as South Africa also im­ports all of its rice. The key rea­son is that South Africa and Zim­babwe are not agro-eco­log­i­cally en­dowed for rice pro­duc­tion. How­ever, Zim­babwe could be­come self-re­liant in the case of other food prod­ucts or com­modi­ties, such as maize, wheat and soya bean, among oth­ers, if favourable and stable pol­icy con­di­tions were es­tab­lished. Af­ter all, Zim­babwe was once self-suf­fi­cient in the pro­duc­tion of maize (not to be con­fused with be­ing a “bread­bas­ket”, as Zim­bab­wean politi­cians have in­cor­rectly claimed in the past).

If we look at the coun­try’s maize data for the two decades prior to Robert Mu­gabe’s pres­i­dency, from 1960 to 1980, Zim­babwe’s maize pro­duc­tion out­paced con­sump­tion by an av­er­age of 400 000t/year, mak­ing it a net ex­porter. This con­tin­ued into the first half of Mu­gabe’s rule, from 1980 to 2000, al­beit with a grad­u­ally de­clin­ing maize trade bal­ance. Wheat pre­sented a some­what sim­i­lar trend, be­fore the dras­tic de­cline in pro­duc­tion from 2001. Since then, Zim­babwe’s agri­cul­ture sec­tor has col­lapsed largely due to ill-con­ceived land re­form poli­cies. The coun­try has re­mained a net im­porter of the com­mod­ity.

Key sup­pli­ers

The coun­tries that have been key sup­pli­ers to Zim­babwe in the re­cent past are South Africa, Zam­bia, Mau­ri­tius, Mozam­bique, Malawi, Thai­land, the UK, the US and China. In value terms, about half of 2016’s US$1 bil­lion (R14,4 bil­lion) im­ports orig­i­nated in South Africa. I high­light this not only be­cause of its mag­ni­tude, but to make the point that agro-eco­log­i­cally speak­ing, prod­ucts that are pro­duced in South Africa can gen­er­ally also be pro­duced in Zim­babwe.

While Zim­babwe ad­dresses its land re­form set­backs, the agri­cul­ture min­istry should take ad­van­tage of South Africa’s agri­cul­tural ca­pa­bil­i­ties. This could be done by ei­ther col­lab­o­rat­ing on de­vel­op­ment projects, or in­cen­tivis­ing South African agribusi­nesses to open op­er­a­tions in Zim­babwe and pro­mote skills trans­fer be­tween South African and Zim­bab­wean farm­ers. I men­tion this cog­nisant of the fi­nan­cial liq­uid­ity is­sues in that coun­try, but as­sum­ing that over time, things will be re­solved.

most com­modi­ties pro­duced in sa can be pro­duced in zim­babwe

Boost the trade bal­ance

An im­prove­ment in the Zim­bab­wean agri­cul­ture sec­tor would not only boost its trade bal­ance, but also im­prove liveli­hoods.

Data from the World Bank show that Zim­babwe’s agri­cul­tural em­ploy­ment as a per­cent­age of to­tal em­ploy­ment was at 67% in 2014. So an im­prove­ment in agri­cul­tural yields would have far-reach­ing pos­i­tive spin-offs.

Over time, the other in­dus­try the Zim­bab­wean au­thor­i­ties need to think about is agro-pro­cess­ing. To this end, there is a lot that can be learnt from South Africa and the tech­nol­ogy it uses. Cross-bor­der knowl­edge shar­ing is crit­i­cal to Zim­babwe’s ef­forts to re­build it­self af­ter decades of ill-con­ceived poli­cies.

Agribusi­ness per­spec­tive by Wandile SihloboWandile Sihlobo is head of eco­nomic and agribusi­ness in­tel­li­gence at Ag­biz. Email him at [email protected]­biz.co.za.

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