Zim in­creas­ing in­tra-re­gional trade:

The Manica Post - - Front Page - Kudzanai Gerede Busi­ness Cor­re­spon­dent

STA­TIS­TICS show that Zim­babwe de­spite its gen­er­ally low lev­els of ex­ports, has taken a ma­jor in­cli­na­tion to­wards en­hanc­ing trade with its re­gional coun­ter­parts in the Sadc re­gion.

This came out at the In­tra-Africa Trade Fair (IATF) meet­ing held in Harare re­cently and at­tended by the Min­is­ter of Fi­nance Pro­fes­sor Mthuli Ncube and cap­tains of lo­cal in­dus­try and trade where it emerged that 93 per­cent of the coun­try’s to­tal ex­ports in 2017 were within Africa, with the bulk of it (63%) des­tined for South Africa.

On the im­ports side, 53 per­cent of Zim­babwe’s im­ports were of African ori­gin with South Africa once again a dom­i­nant trad­ing mar­ket con­sti­tut­ing 40 per­cent of im­ports.

Highly in­dus­tri­alised South Africa con­tinue to en­joy a sub­stan­tial trade sur­plus with Zim­babwe.

This is re­gard­less of the fact that since 2016, Zim­babwe has tem­po­rar­ily re­stricted over 40 items from be­ing im­ported into the coun­try as Gov­ern­ment tried to in­cu­bate its fallen in­dus­trial base from im­ports that were dom­i­nat­ing the mar­ket.

Gov­ern­ment has since late last year re­laxed the im­port re­stric­tion mea­sures to al­le­vi­ate ba­sic com­modi­ties short­ages.

Ac­cord­ing to United Na­tions COM­TRADE data­base on in­ter­na­tional trade, in 2016 of Zim­babwe’s top 6 ex­port mar­kets, four of them were within the Sadc re­gion namely South Africa ($ 2.25 bil­lion), Mozam­bique (267.70 mil­lion), Zam­bia ($ 72.2 mil­lion) and Botswana ($29.08 mil­lion). Only United Arab Emi­rates and Bel­gium were the non-SADC coun­tries on the top 6 ex­port list.

How­ever wor­ry­ingly, Zim­babwe’s ex­port prod­ucts are pre- dom­i­nantly raw, with ex­trac­tives such as gold, di­a­mond, chrome, plat­inum, iron, steel, and nickel and non-min­eral prod­ucts such as cot­ton, to­bacco, ce­ment, raw hides and leather mak­ing the coun­try’s ex­port bas­ket.

This is why Zim­babwe’s ex­ports are largely skewed to­wards South Africa which presents a mar­ket for raw ma­te­ri­als for its in­dus­tries and also jus­ti­fies Zim­babwe’s trade deficit with its big­gest trade part­ner.

It is also why Sadc has come up with a tem­plate to bal­ance the urge for trade among mem­ber state and min­imise trade deficits by fos­ter­ing for in­dus­tri­al­i­sa­tion in its re­vised in­dica­tive strat­egy de­vel­op­ment plan 2015-2020 as well as the Sadc in­dus­tri­al­i­sa­tion strat­egy and roadmap.

Zim­babwe is tak­ing con­sid­er­able ef­forts to­wards this, fol­low­ing the suc­cess­ful set­ting up of Spe­cial Eco­nomic Zones to kick-start its in­dus­tri­al­i­sa­tion agenda and di­ver­si­fi­ca­tion of ex­port prod­ucts.

Speak­ing at the IATF busi­ness meet­ing, Prof. Ncube said in­fra­struc­ture bot­tle­necks and low lev­els of in­dus­tri­al­i­sa­tion within the re­gion was the chief cul­prit to lit­tle trade among mem­ber states in Africa.

“Some of the ma­jor chal­lenges be­hind poor in­tra African trade in­clude poor in­fra­struc­ture (roads, tech­nol­ogy, load­ing and of­fload­ing equip­ment), lack of in­dus­tri­al­i­sa­tion, sim­i­lar­i­ties in prod­uct port­fo­lios and bor­der in­ef­fi­cien­cies, non-tar­rif bar­ri­ers and lack of prod­uct com­pet­i­tive­ness,” he said.

The Sadc bloc com­prises of gen­er­ally small economies which in or­der for lo­cal com­pa­nies to sus­tain growth they have to tap into the ex­port mar­kets.

Economies such as Namibia, Le­sotho, Swazi­land and Botswana have pop­u­la­tions of less than five mil­lion while Zim­babwe, Zam­bia, Mozam­bique and Malawi av­er­age around 14 mil­lion. Th­ese are fig­ures that fall short of sus­tain­able prod­uct mar­kets when com­pared to East Africa for in­stance where Kenya, Ethiopia, Uganda and Tan­za­nia have pop­u­la­tion av­er­age of over 70 mil­lion each.

Ex­perts say with such small pop­u­la­tions, busi­nesses op­er­at­ing in Sadc mem­ber coun­tries ought to look out­ward to en­large their mar­kets so that economies of scale are eas­ily achiev­able which brings price com­pet­i­tive­ness. “We have sec­tors such as iron and steel, phar­ma­ceu­ti­cals, (and) agro-pro­cess­ing that can be part­nered to ex­port to the world. We have a chal­lenge that the level of com­plex­ity is still low. Zim­babwe has got a num­ber of com­pa­nies pro­duc­ing pre­dom­i­nantly for lo­cal con­sump­tion and yet th­ese prod­ucts can be sup­plied else­where,” Con­fed­er­a­tion of Zim­babwe In­dus­tries pres­i­dent Sife­laniJa­bangwe said.

Ow­ing to poor lo­gis­ti­cal in­fra­struc­ture and min­i­mal trans­port con­nec­tiv­ity with the global mar­kets the Sadc bloc presents a mas­sive mar­ket for most de­vel­op­ing Sadc economies.

Min­is­ter Ncube

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