2020: Energising Zim’s export growth
ONE key component of the vision is the need to enhance international trade, anchored on exporting value-added products and services. Efforts are also targeted at transforming Zimbabwe from being an exporter of raw commodities and semi-processed products to being an exporter of internationally competitive high value products.
To this end, an array of activities have been lined up this year to develop and promote Zimbabwe’s exports as well as to ensure that Zimbabwe has recognisable export brands.
One of the major highlights of the year will be the establishment of business development plans by all provinces, based on their areas of comparative advantage.
This comes from the realisation that the drive towards Zimbabwe’s export growth requires the contribution of all stakeholders, particularly the active participation of provinces, in line with Government’s devolution drive.
The long-term plan is to make sure that contribution to exports is cascaded to the district level, as well as making sure that some of the functional irrigation schemes have a 20 percent export component.
ZimTrade, the national trade development and promotion organisation, as well as the implementation and coordination organisation for the National Export Strategy, will work with all provinces in inculcating an export culture.
The development of exports at provincial level will see provinces specialising on production of products that have a comparative advantage.
To improve the contribution of provinces to exports, this year will see the initial setting up of provincial export clusters and the development of linkages between established companies and SMEs in each of the 10 provinces.
Arguably, every province is unique and has the potential to drive its own economic agenda. Full participation through focusing on niche products or services will boost exports.
This year is also expected to see a deliberate focus on developing youth-led businesses so that they become export ready.
Undoubtedly, the youth are an important demography in the global economy. According to the United Nations, Africa has the fastest growing youth population in the world, with approximately 60 percent of its population under the age of 24.
The International Trade Centre (ITC) states that: “A focus on youth in trade is particularly relevant today, given that young people account for a large and growing proportion of the population in many developing countries.”
Given the importance of the youth, a number of programmes and activities will be implemented this year, targeting capacity development for youth-led businesses.
Capacity development interventions will focus on areas such as strategy development, creative design and use of technology to develop their exports products.
Other interventions targeted at increasing contribution of youth-led businesses are expected to focus on incubation programmes. This is expected to culminate in an increase in the number of Zimbabwean exporting businesses.
Related to this is the need for tertiary institutions to ensure the current curriculum includes an aspect of inculcating an export culture as well as focusing practical aspects of export development and promotion.
The incubation hubs being established in most tertiary institutions are a good starting point as it is from these that youth-led start-ups are being established.
With enough nurturing, these can be strong SMEs that will contribute to the country’s export earnings.
At the same time, discussions will also focus on the development of women-led business and rural-based businesses.
Plans are to capacitate at least 50 women-led business during the year, following which most of them should be ready to export.
To achieve this, programmes to promote and develop female entrepreneurs, including cross-border traders, will be implemented to transform these businesses into sustainable and fully fledged exporting enterprises.
Focus will also be placed on assisting women-led businesses value-add their export products and services, in pursuit of more returns on the export market.
As most of these businesses are Small and Medium Enterprises (SMEs), focus will also be placed on promoting small businesses as they account for the largest businesses operating in Zimbabwe.
Further to this, activities this year will also focus on increasing contribution of the services sectors to national exports.
There is potential in the provision of professional services in the construction, education, medical and engineering sectors.
Globally, trade negotiations are now shifting from physical goods to services.
With regards to promotion of export products, focus will be on diversifying the range of export products to different markets of the world.
However, the starting point will be riding on low-hanging fruits for Zimbabwe, which is the horticultural sector, particularly in the form of fruits, nuts and vegetables that presents opportunities for Zimbabwean sector players to grow their exports.
Smallholder farmers and local communities are expected to play a key role in the development of the sector as focus is on increasing its contribution to Zimbabwe’s exports.
The potential horticultural produce include blueberries, avocados, shelled macadamia nuts, potatoes and kale, among others.
In addition, mushrooms, mange tout peas, green tea, carrots, beetroot, dried mixed vegetables, chillies and peaches have a potential export market.
The arts and crafts sector is another low-hanging fruit that Zimbabwean exporters can take advantage of as they increase their share of the global market.
The diverse products that can be exported from the sector include pottery, basketry, textiles, jewellery, wood carvings and stone sculptures.
Already, there are local players supplying countries such as China and Japan. With the right support, they can increase supply to European markets.
This year, there are plans to increase the presence of local products on the regional markets. Zimbabwe’s embassies will assist in identifying opportunities in those countries.
The main target is to increase exports to countries such as Zambia, Democratic Republic of Congo, Mozambique, Malawi, Botswana, Namibia and Angola.
To facilitate easy access into these markets, a regulatory compliance programme will be implemented to look at sanitary, packaging and labelling guidelines.
Export promotion activities will also be increased in some regional and global markets in order to promote exports into non-traditional markets.
Cognisant of the challenges that the exporting community faced in 2019, including the shortages of electricity and fuel, the year 2020 is expected to bring solutions, pinned on macro-economic enablers, that will enhance export competitiveness.
For example, focus should be on retooling industry with energy efficient equipment, which will make it easy for local companies to produce more with little energy.
Arguably, most companies in Zimbabwe are using antiquated machinery. Such companies will not be able to compete in export markets.
Such antiquated machinery falls between Industrial Revolution 2,0 and 3,0. Some are even on 1,0.
In other countries, they are already looking forward to the latest industrial revolution 4,0.
Using latest technology, where most machines use less energy, increases output of quality products. lt also keeps production costs low, thereby improving competitiveness of local businesses.
This year, ZimTrade will assist companies to improve on their production efficiencies, competitiveness and the quality of their products through technical intervention programmes. This will be done with the support of experts from Netherlands-based PUM and SES of Germany.
These interventions are expected to bring sustainable solutions that will improve Zimbabwe’s share of the global market.
With regards to demand for foreign currency, particularly for companies that import raw materials in production of export products, this year should see the increase in the uptake of locally produced commodities.
To achieve this, the development of entire value chains will ease demand for foreign currency as most materials will be sourced from within our borders. For example, some shoe manufacturers in Zimbabwe are currently sourcing their leather from as far as Italy.
Indications are that the low uptake of locally produced leather is a result of the quality and inconsistent supply.
Thus if the entire leather value chain is developed — from cattle rearing to the processing of leather — supply of quality raw materials to the local shoe manufacturers will be improved. In turn, the demand for foreign currency to import raw materials will be reduced.
If developed, the leather value chain, just like many other value chains, will create employment and save the much-needed foreign currency.
Equally important this year is the need to promote the ease of doing export business, in line with Government’s ease of doing business reforms.
ZimTrade will continue engaging Government and related agencies to address statutory impediments identified under the Rapid Results Initiative (RRI), especially those related to export regulations, processes and procedures.
The RRI adopted a “business unusual” approach and recommended reforms to improve the business landscape for exporters.
This year, the exporting businesses will look forward to the speedy removal of outstanding impediments that are currently undergoing administrative and legislative processes.
The cyclic weather patterns result from the El Nino Southern Oscillation ( ENSO), a naturally occurring phenomenon that involves fluctuating ocean temperatures in the equatorial Pacific Ocean.
El Nino is a term for the warming phase of the ENSO, while the cooling phase, which has global climate impacts opposite to those of El Nino, is referred to as La Nina.
El Nino and La Nina can make extreme weather events such as droughts, floods and storms more likely, as they influence temperature and rainfall patterns.
Strong El Nino events occurred in the years 1957-58, 1965-66, 1972-73, 1982-83, 1987-88, 1991-92, 1997-98 and 2015-16. The latter is the strongest on record. Strong La Nina events were experienced in 1973-74, 1975-76, 1988-89, 19992000 and 2010-11.
In the Southern African Development Community ( SADC) region, an El Nino event is characterised by droughts while La Nina is associated with wet conditions and floods.
An analysis of El Nino cyclic events between 1950 and the present shows that they are increasing in intensity.
The impacts of these cyclic weather patterns are made worse by changing global climate.
Irrespective of El Nino events, there is a long-term trend towards the warming of the Earth’s climate because of rising heat-trapping greenhouse gas emissions from human and industrial activities.
A new report titled “The Global Climate” has identified significant changes in climate since 2015.
The report, published by the World Meteorological Organisation ( WMO) ahead of the United Nations Climate Summit held in New York in September last year revealed that there have been significant changes in climate over the past five years, including dramatic rises in temperature, sea level and the intensity of extreme weather events such as droughts and floods.
According to the report, the period 2015-2019 is the warmest on record, with the year 2016 being the warmest year on record globally.
Temperatures during the period are said to have been over 1°C higher than the pre-industrial period.
Occurrence of an El Nino, under an increasingly warming environment as a result of climate change, has serious impacts on climate-sensitive sectors such as agriculture, water supply, energy and tourism.
The El Nino-induced drought during the 2015/16 season impacted on the energy sector and left an estimated 40 million people food-insecure, with Botswana, Eswatini, Lesotho, Malawi, Mozambique, Namibia and Zimbabwe declaring a state of national disaster.
The sensitivity of agriculture to climate-induced water stress is likely to deepen the existing challenges of declining agricultural outputs, declining economic productivity, poverty and food insecurity, with smallholder farmers particularly affected.
The region is particularly vulnerable