Exploring export opportunities in Germany

Trade Focus
Allan Majuru

ZIMBABWE is on a major drive to balance its export market composition, which, for many years, has been dominated by South Africa.

While trading with countries in the region is easy and less demanding for local companies, over-reliance on one country exposes local businesses to economic, political and social shocks that may occur there.

No wonder President Mnangagwa has repeatedly emphasised the need for diversified Zimbabwean products to find new markets, riding on good political relations the country enjoys with the rest of the world.

To achieve this, the Second Republic, through the Ministry of Foreign Affairs and International Trade, as well as related institutions, has been focusing on diversifying export markets to ensure Zimbabwean products have a broader market.

One of these potential markets is Germany, which has an extensive consumer base for various Zimbabwean products and services.

As part of the efforts to grow trade and business networks among companies in Zimbabwe and Germany, ZimTrade recently facilitated participation of local companies at two major trade fairs that took place in the Western European country.

More than 15 local businesses in the horticulture, as well as art and craft sectors, engaged with leading buyers in Germany and the rest of the world during the Ambiente and Fruit Logistica trade fairs, held from February 3 to 7 and February 8 to 10, respectively.

The two events provided a platform for local companies to showcase their products and conduct business-to-business meetings with potential buyers and distributors.

Zimbabwe participated at the Ambiente trade fair for the first time, and companies that were exhibiting some exceptional art and craft products got opportunities to engage leading buyers from across the world.

The products exhibited included stoneworks from Guruve and Mashava, as well as hand-made baskets from Buhera, Binga and Lupane. Buyers expressed keen interest in basketry, as well as stone and metal sculptures, with some meaningful leads generated.

During the Fruit Logistica, which is the largest fresh fruit and vegetable fair in the world, a lot of interest was shown, as is always the case, for Zimbabwe’s fresh produce that was deemed to have a unique and rich natural flavour.

Deals worth more than U$5 million were concluded during the two events and for a further US$15 million are under discussions.

During the two trade fairs, ZimTrade also conducted market scans to determine the wide range of opportunities for Zimbabwean products in Germany.

About Germany

Germany — the fourth largest economy in the world after the United States, China and Japan — is a country well known for its engineering and automotive industry, as well as precision manufacturing.

With a Gross Domestic Product of US$4,26 trillion, Germany has the largest economy in Europe, followed by the United Kingdom and France. The German economy grew by 1,9 percent in 2022, despite the ongoing Russia-Ukraine conflict, which has negatively affected a number of European economies.

According to the German Federal Statistical Office, growth witnessed in 2022 was mainly driven by increased consumer spending at the household consumption level.

The growth rate recorded in 2022 was also higher than the average of 1,0 percent the country has been recording in the 10 years between 2011 and 2021.

With a population of over 80 million people, Germany is known for its advanced infrastructure, economic strength, high standard of living and excellent education system.

In 2021, Germany was the third largest importing country in the world, bringing in goods worth US$1,42 trillion and services worth US$381 billion, behind the US and China.

Germany, being a member of the European Union (EU), is one of the European countries and potential markets that Zimbabwe can trade with, as a result of the Eastern and Southern Africa Economic Partnership Agreement (ESA EPA) with the EU, which both countries are signatory to.

This deal is expected to boost bilateral trade and investment flows, and contribute to the creation of jobs and further economic growth among ESA partners.

Looking at current figures, Zimbabwe’s exports to Germany stood at US$39,8 million in 2021, dominated by raw tobacco, accounting for 40 percent of the total exports.

Opportunities, however, do exist for exports of products such as fresh produce, raw hides and skins, black tea, coffee and clothing apparels. ZimTrade has learnt that products with great export potential from Zimbabwe to Germany include essential oils, which are gaining prominence across major international markets.

There are Germany buyers who are importing baobab and marula oil from rural communities in Zimbabwe, and there are indications that the high demand for the products in Germany presents further opportunities for local companies.

Zimbabwe also has the highest supply capacity for raw hides and skins of reptiles, fresh or cured, while horticulture is another area with a lot of potential for export.

In 2021, exports of citrus topped the list of Zimbabwe’s horticultural exports to Germany at over US$2,2 million. In the same period, Germany was the third largest market for Zimbabwe’s peas; the country imported US$2,2 million worth of the produce.

Avocado exports to Germany have also been on an upward trend, with Zimbabwe shipping US$867 000 in 2021, up from US$691 000 in 2020 and US$588 000 in 2019.

Blueberry is another product with a lot of potential in Zimbabwe and exports have been on an upward trajectory. Germany’s total imports stood at US$438 million in 2021, with Zimbabwe contributing US$119 000 of this.

Considering the top quality of Zimbabwe’s blueberries, there is more room to improve export of the produce to the European country. Also, macadamia nuts are starting to gain prominence in Europe, and Germany presents a potential market for Zimbabwe.

Zimbabwe currently exports nuts in shell, mainly to China or South Africa.

Germany imported shelled nuts worth US$77,5 million in 2021 and this presents an opportunity for Zimbabwe to tap into.

For local farmers to earn more from macadamia exports to Germany and the rest of Europe, they need to shell first before exporting.

Zimbabwean farmers have in the past entered into partnerships with the likes of Nescafe in coffee production for export, coming up with brands such as Tamuka muZimbabwe, and so the opportunities to explore this product exist in Germany.

Other products of interest, when it comes to the German market, include men’s apparel.

Germany was second in terms of destination markets for Zimbabwe’s exports after South Africa in 2021.

Allan Majuru is the ZimTrade  CEO.