Online Reporter
ZIMBABWE’s export growth continues, with US$1 billion a month in sales now becoming the norm and a positive trade balance each month for the last few months, the first time that has happened for many years and even then only when extraordinarily tight import controls were applied, rather than in the modern free markets.
But there are still danger signs.
As exports surge, and foreign currency in the willing-buyer willing-seller market run by the banks becomes something that is always there for approved imports, we are seeing rising import bills.
Some of this may be catching up as machinery is now the second largest group of imports, but other signs suggest we still need to move faster on building up our own internal sources of processed raw materials and services.
That means continuing to advance our primary industrial base, which had been severely slashed back during the economic challenges during and after hyperinflation.
We cannot continue to be almost totally reliant on primary mineral exports, led by gold, and agricultural commodities led by cured tobacco leaf.
Our manufacturing sector still tends to be dominated by agricultural processing companies producing food almost purely for local markets, and by secondary and tertiary industries doing final assembly of imported materials and components, again for local markets.
Import substitution is important, and the agro-industrial sector is at least leading on the correct path of converting what our farmers grow to the food we like to eat.
Large advances in agriculture during the Second Republic have seen a large cut back in food imports and in the imports of the raw materials for the millers and oil seed processors.
But there are still gaps filled by imports, principally in oil seeds, where we are still advancing perhaps to self-sufficiency, and for rice and other foods not traditionally grown in Zimbabwe, and for grains such as the durum wheats, although we are now creating capacity for that new crop to supplement our large surpluses of soft wheats.
With most tobacco exported as processed raw leaf, we still have some way to go to have a lot more local processing before we ship.
Recent opening of a cut-rag factory was the sort of advance we need, and more toll manufacturing of cigarettes to get around the usually exceptionally tightly regulated markets in most countries, needs to be pushed.
Fertilisers are now probably the largest agricultural based import and obviously more local production will cut imports.
The Second Republic has been rehabilitating and expanding phosphate mining, the essential start, but there is more we can do for nitrogenous fertilisers, especially as conflict in Eastern Europe and the Middle East has been driving up global prices for these as well as disrupting global supply chains.
The huge advances in mining since the advent of the Second Republic, led by the pro-investment climate that has been built up plus the major effort to bring artisanal gold mining into the mainstream, contributes strongly to exports.
The Government policy of wanting mining companies to process ore locally before export was being implemented somewhat patchily but the recent total ban on all exports of ore and concentrates is already seeing a lot more urgency in finishing and commissioning processing plants.
We need to continue expanding our mining base and finding as many new minerals as possible so that we are not over-dependent on gold.
A wider range of mineral exports means we can then cope better with volatility in global prices. This does not mean cutting back on gold, rather the reverse, but in increasing the value of other minerals we mine and sell and having more different minerals to sell.
While Government policy is to push up the volumes of what our farmers and miners produce, outside a major steelworks, we still export raw materials rather than finished products. Yet those who buy the tobacco and minerals make profits converting these to goods they sell, sometimes back to us.
Manufacturing now needs to use more of our own raw materials to make the final products.
Even our successful agro-industrial sector, that has been the leader in import substitution, now needs to spread its wings and export packets of processed foods, and so create wider markets for our farmers who must, by now, be reaching or exceeding home market limits for a lot of what they grow.
The advances we have made as largely a seller of bulky raw materials in global markets are spectacular under the Second Republic.
But we need to be more serious in implementing Government policies to add a lot more value to most, before we ship. We need to act to maintain our momentum of high economic growth.
