‘Local industry must focus on value addition’

Michael Tome
Business Reporter

THE National Competitiveness Commission (NCC) has implored local industry players to redirect their efforts and strive for more investment in value addition of merchandise to enhance the attractiveness of local produce in the export market.

Like other African countries, Zimbabwe exports low-value raw and semi-finished commodities which are then imported back into the country as finished goods at a much higher price.

NCC said businesses, particularly in the agriculture and manufacturing sectors, should focus efforts on building skills and technologies that will allow production of their own high-value products and grow the country’s export earnings.

Zimbabwe’s share of manufactured exports was estimated at 8, 23 percent in 2020 which was a decline from 11, 4 percent in 2019, figures which give Zimbabwe a low competitiveness edge among comparator countries.

As it stands Zimbabwe’s main exports are dominated by semi-manufactured gold, flue-cured tobacco, nickel ores, and concentrates, ferrochrome, unwrought platinum, cane, unsorted diamonds, and unwrought nickel.

These represent a low percentage contribution as far as export earnings potential from manufactured goods is concerned.

The Government’s economic

blueprint, National Development Strategy 1 (NDS1), strives for enhanced competitiveness through improved value addition, better contribution of manufacturing to GDP, and increased contribution of value-added exports to total
exports, particularly from beneficiated minerals.

Zimbabwe formerly had a diverse export product mix with a high composition of value-added products such as textiles, clothing, and processed foods among other goods but the export product mix has lately been skewed heavily towards raw commodities.

While addressing participants at the 2021 Zimbabwe Competitiveness Report launch, NCC director Brighton Shayanewako said value addition will increase the country’s export earnings as products become more competitive on the international market.

“As a nation, our exports are basically primary products and they are mainly dominated by agriculture and mining output and they are exported without much value addition and that has a bearing on our exports receipts.

“We notice that most of our exports are in raw form, this is critical because as a country we are losing value, as indicated in NDS1 , value addition and beneficiation is critical as it enhances the value of our exports,” he said.

Value addition involves the transformation of primary commodities into intermediate or finished goods for maximum value.

Confederation of Zimbabwe Industries (CZI) president Mr Kurai Matsheza noted that Zimbabwe should continue to craft mechanisms and strive to walk the long-enunciated talk of value addition and beneficiation particularly given the potential growth of markets in face of Africa Continental Free Trade Area (AfCFTA).

He alluded to the need to have products that will be competitive in the regional market.

“The recent census shows that our population is not growing much, we are a small nation, to grow this economy focusing on local population, will not take us far.

“So our focus should be on more value addition so that our products can compete with products from countries outside there, especially now that we have the AfCFTA that’s what we now have to focus on to grow our economy,” said Mr Matsheza.

The Zimbabwe competitiveness report sought to assess the country’s progress in attaining competitiveness goals, targets, and performance relative to comparator countries, as well as providing evidence-based government policies and programmes on identified gaps.

NCC chairperson Mr Charles Msipa indicated that Zimbabwe needs to work on systems that bolster local industry’s export competitiveness in the face of the AfCFTA which requires efficiency to match regional counterparts.

“ . . . of note is that Zimbabwe signed the AfCFTA which is a milestone towards trade liberalisation and as a nation we need to keep abreast with these new developments by enhancing our competitiveness and our doing business environment to ensure the success of our businesses.”

According to NCC, the competitiveness report will contribute to the formulation, implementation, and review of Government policies towards sustainable growth and development in line with Vision 2030 and the United Nations SDGs.