BY MTHANDAZO NYONI
ZIMBABWE has to play up its comparative advantage in the tourism and services industry to hedge against shocks in the export market, Foreign Affairs and International Trade minister Sibusiso Moyo has said.
Addressing an exporters meeting in Bulawayo, Moyo said Zimbabwe’s export performance has largely remained subdued over the years, failing to spur economic growth and development.
Zimbabwe’s exports stood at US$4 billion in 2018 up from US$3,5 billion in 2017, an increase of 14%. While total imports increased by 26% from US$4,96 billion in 2017 to US$6,26 million in 2018, upsetting the balance of trade.
The country’s export composition has been dominated by primary commodities with minerals and tobacco contributing over 70% to the total earnings. Exports of services have averaged US$500 million annually.
“I note that Zimbabwe’s export market remains limited to a few traditional trading partners,” Moyo said.
In 2018, South Africa remained the largest market for Zimbabwean products, absorbing 51% of total exports, followed by the United Arab Emirates (18%), Mozambique (15%), Zambia (10%), Belgium (2%) and China (1%).
“With this current state of affairs, the need to inculcate and entrench an export culture among our enterprises across the sectors cannot be overemphasised.
There is also need for concerted effort to diversify the export products and markets for the country to be able to grow the export base,” Moyo said.
“Potential is there for Zimbabwe to generate foreign exchange through export of services such as tourism, business services, medical services and education services, among others. The competitiveness challenges affecting exporters of other commodities and services need to be addressed as a matter of priority if the country is to meaningfully gain from trade,” he said.
Given the small size of the internal market and the financial liquidity challenges Zimbabwe is facing, Moyo said it was important for the country to utilise market access opportunities in Sadc, the Common Market for Eastern and Southern Africa, the Tripartite, the African Union and beyond the continent to increase exports.
Speaking at the same event, ZimTrade chief executive Allan Majuru said Zimbabwe needs to diversify its exports.
Current trade data shows that the country was overly reliant on raw material exports namely, minerals (54%) and unmanufactured tobacco (21,3%), a situation “that is not healthy for the country’s economy as it means that we are simply exporting jobs to other markets where these are being value-added”.
“Additionally, Zimbabwe’s economy is at risk because the bulk of our exports are destined mainly to South Africa. This situation leaves us vulnerable to economic shocks in (that) market,” he said.
Moyo said exporters need to be aggressive to get into even risky areas to seize opportunities.
Zimbabwe also signed an Interim Economic Partnership Agreement with the European Union, enabling the country to continue having market access into that market on a duty free and quota-free basis.