Zim exports drop 13pc

Bianca Mlilo Business Reporter
ZIMBABWE’S exports dropped 13 percent last year compared to 2014 with the country losing its competitive edge against cheap imports, ZimTrade said.

In its monthly newsletter, ZimTrade revealed that exports in 2015 amounted to $2.7 billion, representing a 13 percent decline from 2014, when the figure stood at $3 billion.

One of the reasons for the decline in export performance is that minerals, which constitute the bulk of Zimbabwe’s exports, have been affected by the falling international commodity prices, said the trade promotion agency.

It said value added (manufactured) exports, which normally fetch higher earnings, did not perform well during the same period.

“The manufacturing sector’s export performance between 2014 and 2015 indicates that the sector’s capacity to export is declining. Estimates from the Reserve Bank of Zimbabwe show that in 2015, manufactured exports were about $475,2 million, having declined by about seven percent compared to 2014,” said ZimTrade.

Seven representative manufacturing sub-sectors were selected for the analysis, namely: clothing, furniture, food, beverages, engineering, leather and footwear as well as agricultural inputs.

“In 2015, these subsectors constituted about 10 percent of total exports, down from 13 percent in 2014,” said Zimtrade.

The leather and footwear subsector registered the highest decline of 71 percent to about $12 million, followed by horticulture, which registered a decline of about 43 percent to $25 million.

The furniture subsector recorded a decline of 42 percent, engineering 40 percent, food 27 percent and agricultural inputs 17 percent.

Processed foods remained the dominant subsector in 2015 constituting about 32 percent of manufactured exports, having declined from about 41 percent in 2014.

In 2015 ZimTrade said the sub-sector’s exports also constituted about six percent of total export compared to seven percent in 2014.

“On a positive note, the clothing sub-sector registered an increase in exports of about 70 percent in 2015. The beverages sub-sector also registered an increase of 13 percent to about $9 million in 2015. While this is a positive development, it’s still far below Zimbabwe’s potential,” said Zimtrade.

“The above performance is a reflection of the difficult environment that Zimbabwean manufacturing companies are operating in.”

Companies face various challenges that affect their production and reduce the price competitiveness.

These include high cost of transport, strengthening of the US dollar and the erratic power supply.

Obtaining export documentation (permits/licences) and achieving export compliance is also cumbersome for exporters.

“There’s, therefore, an urgent need for Zimbabwe to address trade facilitation issues and implement reforms if we’re to realise an export led economic growth,” said ZimTrade.