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Oliver Kazunga Senior Business Reporter
ZIMTRADE says it is in talks with the government regarding the re-introduction of direct financial incentives on exports aimed at encouraging local companies to increase exports on the back of a ballooning trade deficit. The government suspended direct financial incentives on exports at the height of economic challenges a few years ago.

Following the introduction of the multicurrency system in February 2009, the country continues to experience an influx of imported products from countries such as South Africa.

According to the Zimbabwe National Statistics Agency, the country’s trade deficit widened to $3,3 billion in December 2014 from $2,97 billion in the prior year.

ZimTrade board chairman Lance Jena told Business Chronicle in Bulawayo yesterday that the national export promotion agency had already started engaging the government and interested parties to re-introduce export incentives in their solid form.

“There’s no doubt about the importance of recognising export incentives in stimulating exports and regaining our position as dominant player in Southern Africa.

“As ZimTrade, we’ve already started engaging our parent ministry (Industry and Commerce) and other stakeholders to ensure we bring back export incentives in their solid form,” said Jena.

“Export incentives are a very wide range of measures, some of them are already there to encourage people to export. The final that most exporters are clamouring for is the direct financial gain, which is some kind of subsidy. It enables you to be price competitive in the destination market.”

Jena said a plethora of incentives could be offered to industry to stimulate growth of the export sector. He said direct financial incentives might be re-introduced anytime soon depending on the country’s economic performance.

“Direct financial incentives impact on the price competitiveness. As you export, the incentives allow exporters to enjoy rebates, which enable exporters to break even,” Jena added.

He said a number of countries in the region including South Africa were already offering direct financial export incentives to their firms.

Jena said ZimTrade was coming up with a strategic plan aimed at increasing exports in the long-term.

Addressing captains of industry, the ZimTrade board chair said Zimbabwe has been recording a trade deficit since 2009, a situation that he said was not sustainable. Against this background, he said, there was a need to grow exports in pursuit of an export-oriented growth strategy in line with the Zimbabwe Agenda for Sustainable Socio-economic Transformation.

He said ZimTrade was committed to contributing to the revival of Bulawayo.

“We’re cognisant that it might be difficult for all industries to be resuscitated due to various factors including global shifts in product and service demand. However, this should not deter us; rather it should encourage us to be innovative as well as responsive in order to cater for the ‘new’ demands,” he said.

Jena said in 2012, ZimTrade started implementing its turnaround strategy and was already strengthening its capacity to be more responsive to exporting firms.

“Last month we conducted, in Bulawayo, a week-long executive development programme on international trade in collaboration with the Indian Institute of Foreign Trade,” he said.

Following the launch of the Zimbabwe-European Business Information Centre (Zim-EBIC) in Bulawayo on Wednesday, Jena challenged city firms to make use of the information centre, which provides market intelligence critically needed in penetrating export markets in the region and beyond.