‘Solution lies in value added exports’

Pride Mahlangu, Business Reporter

LOCAL producers should expand their export footprint to survive the prevailing inflationary environment through earning more foreign currency, Buy Zimbabwe has said.

While acknowledging the challenging economic climate facing businesses and consumers, it said an aggressive export strategy was a viable option. 

Exports are the major source of foreign currency to the country but the economy continues to suffer from increased imports.

This requires that Government and local companies come together and map a strategy to increase domestic production with focus on exports, said Buy Zimbabwe in a statement yesterday.

“For the local industry it is crucial to expand markets beyond the borders of the country to survive. The local market is shrinking since the local consumers’ buying power is being eroded on a day to day basis. 

“At the same time, it’s not an option to let business crumble. Companies are encouraged to also explore the foreign markets,” it said.

Zimbabwe is ranked 132nd in the world in terms of exports, according to the Economic Complexity Index (ECI), which shows the need for more improvement towards export growth. 

The country mainly exports raw minerals, and farm products like tobacco and cotton. This emphasises the need for local industry to export finished products in order to attain competitiveness in the global market.

“Zimbabwe’s export market is limited because most minerals and commodities are in raw state. For Zimbabwean products to be internationally competitive, industries should now focus on exporting finished products rather than primary and semi-processed commodities,” said Buy Zimbabwe.

“Government should assist local industries to get state-of-the-art equipment so that they produce finished and ready to use products. 

“If local companies, especially in the mining sector, add value to their exports, they will generate more revenue than unprocessed raw products.”

According to the Reserve Bank of Zimbabwe (RBZ) latest statistical data, the country’s trade balance widened from a deficit of US$165.9 million registered in the first quarter of 2019, to a deficit of US$450.7 million in the second quarter of 2019. — @pridesinstinctz