The Sunday News
Gabriel Masvora Business Editor
ZIMBABWE imported goods worth more than R5,6 billion from South Africa in the first three months of the year, raising worries over the growing import bill and fears that the country was fast becoming a supermarket of the neighbouring country.Figures released by the South Africa Revenue Service last week, showed that Zimbabwe only exported goods worth a paltry $460 million creating a trade deficit of more than R5,2 billion.
The figures show that vegetables constituted the biggest chunk of exports totalling more than R986 million followed by chemicals that were more than R915 million.
Other products which pushed the figures up include machinery and prepared foodstuffs.
Sars noted that raw hides and leather were the least imported goods from South Africa at just R4 million.
Mineral products, the figures show, led Zimbabwe exports to the country totalling R178 million followed by prepared foodstuffs at R110 million.
Most minerals mined in Zimbabwe are exported to South Africa for refining as the country does not have the infrastructure to value-add its minerals.
Government has since implored mining companies to beneficiate minerals before exporting them as the country was losing millions in potential revenue.
Zimbabwe failed to export any animal or vegetable fats during the period under review.
There has been growing fears that because of the influx of imported goods, Zimbabwe was fast turning into a supermarket of regional economies.
Figures released by ZimStat indicated that in most supermarkets, around 70 percent of products are imports mainly from South Africa and 30 percent are locally manufactured products.
The country’s exports competitive edge has been pushed down by limited production in most companies.
Even the few companies that are running rarely export due to a number of problems among them duty barriers and failure to produce quality goods that meet export standards.
According to Confederation of Zimbabwe Industries’ manufacturing survey report, local firms have also struggled to export due to the fact that local products cannot compete in outside markets, in terms of both price and quality.
The survey also revealed that industry was suffering from a shortage of working capital to meet orders, high cost of production which is rendering locally produced products expensive, and failure to identify potential export markets.
CZI noted that the five most problematic factors when exporting include access to trade finance, identifying potential markets and buyers, access to imported inputs at competitive prices, difficulties in meeting quality and quantity requirements and cost of delays during domestic transportation.
Zimbabwe’s trade promotion body, ZimTrade, in another survey released last month said although South Africa had remained the largest export destination for local goods, most companies were still failing to export.
It said at least 71,4 percent of Zimbabwe companies that used to export in the last five to 10 years had stopped.
The survey also showed that 42 percent of goods produced in Zimbabwe were certified meaning more than half of goods produced by local companies do not meet export requirements.
Companies in Zimbabwe also suffer from inferiority complex with the survey showing that 36 percent perceive their goods to be of lower quality than those from South Africa.
Economists feel that the growing trade deficit between Zimbabwe and South Africa was a sign of the need to quickly address the problems affecting the country’s manufacturing sector.
Bulawayo economic commentator Dr Eric Bloch said the figures showed that the country had a long way to go in trying to address its manufacturing sector.
“Government must quickly come in and address the issue of helping industries to improve production so that they can export,” he said.
Apart from the issue of helping companies access capital, Dr Bloch said Government must come up with export incentives to encourage more companies to export their products.
Some of the incentives would include banning of sub-standard goods as Zimbabwe had seen uncertified and sub-standard goods coming in through our borders.
These sub- standard products hinder local production as companies cannot compete due to high production costs.
Other economists also feel that for companies to boost production, Government must move quickly to promote foreign direct investment as most companies needed fresh capital to improve production which would boost exports.
They feel that overtones from Government that it was going to come up with a sectorial approach to the indigenisation programme must be implemented quickly to give direction to investors.
“Both President Mugabe and Finance Minister (Patrick) Chinamasa have indicated that there will be changes to the indigenisation policy so the Government must quickly move in to come up with these new changes so that the investors are clear on what to expect when they intend to invest in the country,” noted an analyst with a local financial institution.
