INDUSTRY and Commerce minister Welshman Ncube says there is an urgent need to invest in value addition instead of exporting raw commodities that have a negative impact on the economy.
Report by Nqobile Bhebhe
Ncube told the Zimbabwe International Business Conference on the sidelines of the ongoing Zimbabwe International Trade Fair (ZITF) on Wednesday that revenue was being lost to countries that had embraced beneficiation.
He singled out the cotton, textiles and leather sector as areas that required investment.
“Areas with potential for value addition include the cotton and textiles sector,” Ncube said.
“The cotton sector produces between 270 000 metric tonnes and 300 000 metric tonnes of seed cotton per annum of which 41% is converted through ginning into cotton lint.
“Zimbabwe’s textile industry currently cannot consume all the lint produced and ginners are exporting 70% plus of total production, with the remainder being further processed by the spinners.”
Ncube said there was vast room for investment to add value to cotton lint within the spinning sector.
He said processed yarn was also being exported without full beneficiation.
The leather sector also presented another area with investment opportunities along the value chain, Ncube said.
“Currently, raw hides and skins are being exported and this does not augur well for the country in general,” he said.
“The country is well-endowed with exotic skins obtained from crocodiles, buffalo, hippo and other wildlife.”
Ncube said investment was needed as products made from the skins were highly sought after in the major European fashion houses.
“Zimbabwe could benefit from expertise to locally manufacture a variety of products from these exotic skins as compared to exporting them raw,” he said.
Ncube said a Leather Sector Strategy would be launched in mid June.
Zimbabwe’s exports closed the year 2012 at $3,8 billion with imports at $7,484 billion and a resultant unsustainable trade deficit of $3,6 billion.
“The major contributor (to the trade deficit) has been that most of our exports are in raw form and attract low prices on the international market giving us low export earnings” Ncube said.