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Zimbabwe’s export growth

2020, Energising Zimbabwe’s export growth

Zimbabwe’s thrust is that of attaining a prosperous and empowered upper-middle-income nation by 2030.

To achieve this, the government has been placing emphasis on regaining a productive economy sustained by a highly industrialised and mechanised manufacturing sector.

One key component of the vision is the need to enhance international trade, anchored on export of value-added products and services.

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Efforts are also targeted at transforming Zimbabwe from an exporter of raw commodities and semi processed products to 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 and to work towards making sure that Zimbabwe has recognisable export brands.

One of the major highlights of the year will be development of business development plans by all Provinces, based on 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 all Provinces, in line with Government’s devolution drive.

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The long-term plan is to make sure that contribution to exports is cascaded to the District level and 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 specific products that have a comparative advantage.

To improve 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 ten provinces.

Arguably, every Province is unique and has potential to drive its own economic agenda that will result in full participation in export drive through focusing on niche products or services.

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 and 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 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 women 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 some of the following sectors; construction, education, medical and engineering.

Globally, trade negotiations are now shifting from only trade in goods but also trade in services.

With regards to promotion of export products, focus will be on diversifying 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.

Small holder 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.

Horticultural produces with potential include blueberries, avocados, shelled macadamia nuts, potatoes and kale, among others.

Additionally, other produces with potential on the export market include mushrooms, mage tout peas, green tea, carrots, beetroot, dried mixed vegetables, chillies and peaches.

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.

Already, there are local players that are supplying countries such as China and Japan and with right support, they can increase supply to other markets in Europe.

The diverse products that can be exported from the sector include pottery, basketry, textiles, jewellery, wood carvings and stone sculptures.

For export markets, there are plans this year to increase presence of local products in the regional markets where 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 ease access of these markets by local companies, a compliance programme – focusing on regulatory compliance – will be implemented in areas such as sanitary, phytosanitary, packaging and labelling regulations as well as voluntary standards.

Export promotion activities will also be increased in some regional and global markets to promote the exports into non-traditional markets.

Cognisant of the challenges that the exporting community faced in 2019, such as shortages of electricity and fuel, the year 2020 is expected to bring solutions that will enhance export competitiveness pinned on macro-economic enablers.

For example, focus should be on retooling industry with energy-efficient equipment that will make it easy for local companies to produce more with little energy.

Arguably, most companies in Zimbabwe are using antiquated machinery, which is a threat as companies will not be able to compete in export markets.

Such antiquated machinery used by some local companies falls between Industrial Revolution 2.0-3.0 and some even on 1.0, whereas 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 and quality products whilst keeping production cost very 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, with the support of experts from Netherlands-based PUM and SES of Germany.

These interventions are expected to come up with 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 the borders.

For example, some shoe manufacturers in Zimbabwe are sourcing their leather from as far as Italy.

Indications for low uptake of locally produced leather point to issues of quality and constant supply.

Thus, if the entire leather value chain is developed, that is from cattle rearing to processing of leather, supply of quality raw materials to Zimbabwean shoe manufacturers will be improved and in turn reduce demand for foreign currency to import raw materials.

The leather value chain is one example of many value chains that, if all developed, local businesses will create employment and at the same time save on the much-needed foreign currency.

Equally important this year is the need to promote the ease of doing export business, inline 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 through the administrative and legislative process.

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