Africa-wide trade fair will boost Zim exports

THERE is a remarkable increase in interest to venture into the export business in Zimbabwe, which is a positive development.

Trade Focus

Allan Majuru

The number of exporting companies is, therefore, expected to rise.

The Second Republic has been making efforts to capacitate local businesses, particularly those led by previously marginalised groups such as rural communities, women and young people.

For example, President Mnangagwa launched the National Garlic Export Programme in Gutu, Masvingo province, two years ago, which is expected to integrate rural communities into the mainstream horticultural export business.

This is in line with Government’s devolution agenda, which is geared towards improving all districts’ contribution to the national economy, riding on their distinct natural resources.

In addition to the above programme, ZimTrade — the national trade development and promotion agency — is running several programmes targeted at increasing capacities of businesses led by rural communities, women and young people so that they produce competitive products for the export market.

While improving exporters’ capacities is crucial, access to markets is also important.

Targeting easy markets should be top priority.

The easiest markets for small businesses are regional ones and those in other African countries, as they offer several incentives that reduce the cost of doing business.

This is where the Intra-African Trade Fair (IATF) — scheduled for November 9 to 15 in Cairo, Egypt — becomes an important cog in the export-growth drive.

The continent-wide trade fair, whose broad goal is to boost trade among African countries, is expected to benefit Zimbabwean exporters by unlocking business partnerships with buyers from across the continent.

This will make it easy for the country to penetrate non-traditional markets and diversify its export markets, which are presently dominated by South Africa.

The current composition of export markets is not sustainable because overreliance on South Africa will leave local businesses vulnerable to any shocks emerging from that country.

In addition, the IATF holds great potential to accelerate Zimbabwe’s implementation and achievement of both the National Development Strategy 1 (NDS 1) and Sustainable Development Goals through increased trade and resultant growth in foreign currency generation, improved livelihoods and economic growth.

The broad objective of the NDS 1 is to rebalance the economy through increasing the contribution of value-added exports to total exports from 9 percent in 2020 to 20 percent in 2025.

What is clear from the national development blueprint is that the revival of Zimbabwe’s economy will require increased exports, especially of value-added goods and services.

To achieve this, the integration of small enterprises into the export business by unlocking access to markets is crucial.

However, when targeting international markets such as Europe and Asia, this integration is not always easy, as small businesses often face challenges related to logistics and meeting minimum orders required by buyers.

To address these challenges, the IATF will facilitate improved engagements between local small businesses and buyers from regional markets, which have been identified as providing easy solutions as they are closer and have access routes that are not complicated compared to international markets.

Leveraging on trade agreements

With improved access to buyers in the region, small businesses will then leverage on bilateral and multilateral trade agreements that offer incentives for those exporting to African countries.

For example, the COMESA Simplified Trade Regime operational in Malawi, Zambia and Zimbabwe was introduced to make it easy for small-scale cross-border traders to do business by simplifying and harmonising customs and border procedures, and improving efficiency of border-clearance processes.

This is one of the many measures that have been put in place to integrate small businesses into export markets.

Zimbabwe currently has four operational preferential bilateral trade agreements under which exporters can benefit.

These agreements were entered into with Botswana, Malawi, Mozambique and Namibia.

The Zimbabwe-Botswana trade agreement, ratified in 1988, offers reciprocal duty-free trade on all products grown, wholly produced or manufactured wholly or partly from imported inputs subject to a 25 percent local content requirement.

With Malawi, there is a reciprocal trade agreement that has been in place since 1995, with 25 percent domestic value-added requirements.

In Mozambique, the focus of the agreement that came into force in 2005 is to eliminate tariff and non-tariff barriers, and to cooperate in customs and trade promotion.

The agreement provides for duty-free trade between the two countries, with the rules of origin specifying a 25 percent domestic value added.

With regard to the Zimbabwe-Namibia case, there is a reciprocal agreement that has been in force since 1992, which requires at least 25 percent local content for manufactured products and that the two countries should, as exporters, be the last place of substantial manufacturing.

In addition, the African Continental Free Trade Agreement (AfCFTA) was also designed to eliminate obstacles that make it difficult for African businesses to trade with each other.

As countries implement AfCFTA, the landing cost of Zimbabwean products in other African markets is expected to drop, which will make them competitive relative to products coming from outside the continent.

While it is good to have these trade agreements, there is need to first identify buyers in the targeted markets, and that is what IATF will seek to achieve.

Thus, companies participating at the trade fair will take advantage of the unique opportunities presented by the event to establish as much business contacts as possible with buyers from all African markets.

Allan Majuru is the ZimTrade CEO.