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Business Reporter
ZIMBABWE is activating its trade in services with the aim of generating close to $1 billion revenue per year from the service export arm by 2022, the country’s trade promotion agency ZimTrade has said.

While acknowledging the country’s trade policies have tended to focus more on trade in goods, ZimTrade has said that the current national export strategy was geared towards the development of trade in services as a key objective.

“The goal is to increase services contribution to exports revenue by 15 percent from US$396,7 million (2016 fig, Zimstat) to US$920 million by 2022,” said ZimTrade.

To ensure that the needs of the services sector are understood, in June and August this year, ZimTrade conducted engagement seminars in Harare and Bulawayo covering various subsectors such as education, tourism, financial services and human capital. In its latest monthly newsletter, ZimTrade noted that out of these discussions, among other issues raised, was the lack of Information Communication Technology (ICT) infrastructure to support ‘trade in services’ as well as the high cost of data/internet, which is key to the growth of the sector.

Trade in services has over the years grown at a tremendous pace, faster than the growth rate of trade in goods. During one of the engagements, Ernst & Young associate trainer, Mr Newton Madzikwa, highlighted that countries like the United States who are the top exporters of services at US$752 billion annually, have managed to grow their services exports by having supportive policies in place including ICT policies, which companies can leverage to great effect.

According to a German study from the Bertelsman Stiftung foundation titled “Boosting Trade in Services in the Digitalisation Era: Potential and Obstacles, 23 percent of international trade is presently in services, with a growing tendency.” Furthermore, the internet and digitalisation are fundamentally changing the way people, businesses and governments interact. This has led to a new era of globalisation underpinned by the movement of data across national borders, changing the nature, patterns and actors in international trade in goods and services.

“Considering this global trend, Zimbabwe would do well to actively develop its service sector exports. Telecommunications, IT-services, tertiary education, publishing and business services are all growing industries that benefit greatly by leveraging digital tools,” said ZimTrade.

“A publisher in Zimbabwe for example, can ably publish books for clients in South Africa simply by receiving the material online and only shipping the printed final product. Similarly, a graphic designer can provide a service to a client in Botswana without leaving his office in Bulawayo.”

ZimTrade said an efficient digital services sector was not only important for trade in services, but also supports trade in goods. Since manufacturing companies make increasing use of service sector companies in their production processes, better digital services have a huge potential to translate into more competitive industry, it said.

Rapid advances in information technology and the related growth of global value chains have expanded both the level and the range of services tradable across national borders.

“Understanding how world leaders such as USA, Korea and Ireland have managed to grow their services exports to billions in the digital era will guide Zimbabwe on what needs to be done as it seeks to develop a strategy or plan of action to promote services exports,” said ZimTrade.