ZIMTRADE, the country’s export promotion body, has been conducting market surveys in countries around Africa to identify trade and investment opportunities for Zimbabwean products and services. NewsDay (ND) business reporter, Mthandazo Nyoni caught up with the body’s acting chief executive officer, Allan Majuru (AM) to give an assessment on the organisation’s efforts to promote exports. Below are the excerpts of the interview.
By MTHANDAZO NYONI
ND: What is your assessment on your efforts to promote exports?
AM: We are starting to realise some benefits, especially under the new dispensation era. Last year we went to Fruit Logistica in Berlin, a horticultural trade fair. During the trade fair, the number of deals that were struck amounted to around $700 000.
But fast forward to this year, we went to the same trade fair and the deals that were struck increased to $9 million. So already, that is a good thing and the investment that we are putting in is paying off. I think we are now slowly trying to get investment because what was required was more support, especially at the macro-economic level, whereby our efforts could then bear fruit.
If there is no support mechanism in terms of policy for the companies to export competitively, all these efforts will go to waste. But slowly we are seeing a change of attitude, in the way we do business. We took companies to the DRC recently, and deals close to $3 million were struck. After the market surveys we did in Botswana, we have seen companies exporting to Botswana.
ND: What major obstacles are being encountered by companies in their bid to do export their products?
AM: The main challenge currently facing companies is access to foreign currency to bring in raw materials. So companies are now resorting to parallel market, but that makes their goods expensive and less competitive on the international market. So there is risk of them losing that market. There are issues to do with export procedures and processes.
You find out that it takes time for some companies to get export permits, even the processes involved, some of them are not necessary. So that alone also delays the time to push for those markets.
If someone wants a product by a certain date, it has to get there by that date, but if you spend time moving from one office to another to make sure that you have the right documentation to export, it’s going to delay.
One of the biggest challenges that we are facing is the cost of production. It still remains very high.
ND: You spoke about the issue of export permits, what do you think should be done with them, should the government do away with them?
AM: We work with the Ministry of Industry, Commerce and Enterprise Development and they had about 19 products that required exports permits.
So they streamlined those requirements to about four strategic products like the fertilisers, such as gypsum, those products that if you export they might result in shortages. So they streamlined and concentrated on those strategic ones.
So if we are going to export some of the stuff that was previously there, we no longer require export permits. We are also working with the Agriculture ministry to do the same, so that they also focus on strategic products in terms of exports.
But there is also the issue of people moving from one office to other to get the necessary export documentation. We advocated a one stop shop for investment, we need to do the same for export whereby when you want to export you go to one place, where all the documentation is processed and you go.
ND: From your perspective, do you think Zimbabwe is doing enough to promote export business?
AM: Looking at the current situation, I think we have tried, but we can do more. We can definitely do more because we are looking at our competitors in South Africa and Zambia, and we benchmark from there. We see what they are doing and we say we could do better. With South Africa, for companies to penetrate markets, the initially cost of market entry is borne by the government. And we also need to go that route. If you look at Europe and other countries, exporting companies are being given a lot of incentives by their governments for them to be able to compete.
I understand the Reserve Bank of Zimbabwe has offered an export incentive, that’s one thing, but we need to do more for our companies to be competitive because some other countries are doing the same, they are subsidising their companies. They are giving incentives and we are not doing the same in terms of the quantity of incentives we are offering to exporters. For us to get out of the economic challenges that we currently have, we have to export.
Investments are good, but exports bring in money.
ND: You have gone on d trade missions to Botswana and Angola among others. Which countries would you recommend local companies to venture into
AM: What we have realised is that Europe is good but if you look at Zambia, DRC, Angola, Mozambique, we are close to them. But if you look at the amount of exports that we are contributing to their import bill, it is insignificant.
These markets are being mainly dominated by South Africa. So we are now encouraging companies to go to Tete, which is about 390 kilometres from Harare.
You can go and come back the same day, but trade between us and Mozambique is insignificant.
We are also looking at Zambia, DRC and Angola. We have got good relations with these countries and our products, due to the distance advantage, are quite competitive.
So we are lobbying the companies to take advantage of the proximity so that we can grow exports.
So we are mainly focusing in the region per se, but with main specific focus on Zambia, Mozambique, DRC, Angola, Botswana and Namibia also.
ND: Which other countries are you looking forward to visit to conduct trade missions?
AM: Now that we are a member of Sadc and Common Market for Eastern Southern Africa, for us to do export business in those blocs, we get preferential duty treatment such as duty free, quota free or lower tariffs compared to others who are not in these blocs. We are encouraging companies to do business in those blocs.
If you go to Europe, we have got an interim economic partnership with them where we can export duty free or quota free for qualifying products. So we are also lobbying for exporters to go to Europe, but what is now critical, especially if you look at the United States, we are not part of the African Growth and Opportunity Act which offers duty free or quota free access to that market.
So there is need now, at a policy level, for us to be incorporated into that so that we can export competitively into that market. By this time next year, Britain will be out of EU, so I know there are efforts currently to make sure there is trade agreement with Britain so that we can export directly to them duty free.
So these are countries that we are also looking at.