EFFECTIVE export development and promotion strategies are essential for shifting productive sectors of the country’s economy towards export-orientation and global competitiveness.
This was revealed by Philip Phiri, executive director of the National Competitiveness Commission (NCC), at a People’s Own Savings Bank (POSB) and Zimtrade exports seminar held in Harare last week.
Currently, the export sector, which contributes about 60% of Zimbabwe’s foreign currency earnings annually, remains the most sustainable source of foreign currency and important driver for economic growth and development.
“Robust export development and promotion strategies aimed at value addition and beneficiation, through strengthening mineral and agricultural value chains, reviewing the legislative environment and provision of key enablers, are therefore, critical to transform the productive sectors of the economy towards export-orientation and international competitiveness with much focus on value-added exports,” Phiri said.
He said the fact that the country continues to rely heavily on a narrow range of primary products for exports, dominated by minerals and agriculture products which are susceptible to price commodity volatility, was a cause for concern.
“This low level of export diversification, limited value addition and beneficiation contributes to low competitiveness edge amongst the comparator countries,” Phiri said.
“For instance, the country’s share of manufactured exports of about 8% is way below regional competitors such as Botswana (23%), Namibia (26%), South Africa (38%) and Zambia (10%), among others.”
According to the NCC boss, high transportation costs, regulatory bottlenecks on export business, a stronger greenback and the erratic supply of utilities make Zimbabwean products relatively more expensive and less competitive on the export market in the region and internationally.
Limited access to and high cost of trade finance, and limited incentives have also been identified as notable contributing factors.
However, Phiri noted that the micro, small and medium enterprises (MSMEs) sector should not be overlooked as the country gears itself towards the attainment of the set export targets.
The MSMEs sector contributes up to US$8,6 billion (60%) to gross domestic product (GDP) and the sector is highly informal with only 14% formalised.
Given the importance of the sector to export development and growth, the NCC, supported by the International Trade Centre (ITC), undertook the SME Competitiveness Survey from December 2022 to May 2023.
From the survey, agricultural firms struggle more with high logistics costs than manufacturing and services firms. Only 19% use digital technologies for transport and logistics, and all these undermine the sector’s capacity to compete and export development and growth.
The agriculture sector in Zimbabwe is largely dominated by smallholder farmers and continues to be the backbone of the economy, contributing about 11,7% of GDP and 40% to total exports, annually.
Phiri said Zimbabwe does not operate in a vacuum and in this globalisation era, there is need to move with the global trends and assimilate into global markets.
The 2022 World Economic Forum’s Executive Opinion Survey (EOS) cited information and technology services, agriculture and energy as top three sectors, where there is most likely to be new market creation, as well as potential for new global export markets.
For Zimbabwe, the report further highlights agriculture, forestry and fisheries; energy technologies and utilities and financial services and capital markets, as some of the top priority sectors.
