Small businesses urged to pool resources to grow capacity to compete in export markets
Sikhulekelani Moyo, [email protected]
NATIONAL trade development and promotion organisation (ZimTrade) has urged smallholder players in the economy to form associations that will help them upscale their exporting capabilities through improved production and reduced logistics costs.
In an article, ZimTrade said there is an increasing realisation that small businesses play an important role in the economy and development of communities.
However, given the nature of their economic activities and economies of scale, ZimTrade said small businesses often face competitiveness challenges in the export market due to the high cost of doing export business.
As a result, the trade promotion body said in most cases small businesses do not take part in global market activities, leading to minimal contribution to Zimbabwe’s export growth by this sector and if they do, most of the activities remain informal.
To address these challenges, ZimTrade said:
“These associations must form alliances to work together and improve their business performances and capacities. For example, it might be expensive for a local small business to pay for transporting goods outside Zimbabwe but if they belong to an association, there is room to pool resources and fund logistics required to transport goods.”
“This arrangement will ensure that one small business does not bear the huge cost of transporting goods on its own and will be more competitive in the export market. The pooling of resources can also assist small businesses to develop into larger enterprises, through the acquisition of capital equipment that improves on efficiencies.”
This way, ZimTrade said small businesses will have an opportunity to take part in the global export market, and over time grow their businesses.
Additionally, they said entities that are members of business associations have the advantage that their issues are well represented to the Government and other relevant authorities, for an enabling environment for doing business.
According to ZimTrade, examples of success stories of associations in Zimbabwe that are providing business-related support to their members include the Chipinge Macadamia Association which has been active in offering training in production expertise to its members.
The Association hosts seminars and workshops to assist members with production-related strategies, among other things.
Further, the Association is developing a five-year plan that will cover key aspects of value addition and participation of members in the global export market.
Through the five-year plan, Association members are looking forward to improving the output and quality of macadamia nuts and increasing exports to Europe, Asia, and the rest of the African continent.
This way members learn global trends in doing business and brainstorm opportunities in the export market.
“The Midlands Farmers’ Hub, an association of small-scale farmers in the Midlands region (mainly around Gweru) has been working with ZimTrade in capacity building and market linkage support.
“The capacity building activities include export awareness seminars that cover the foundations for export marketing, finance for exports, and export documentation.”
“Other capacity building training covered requirements for organic certifications that will make it easy for local products to penetrate the global market, such as GlobalGAP,” said the trade promotion organisation
“Further to this, ZUBO Trust, a member-based organisation in Matabeleland is working towards enhancing women’s sustainable livelihoods through increased participation in economic activities.
“The trust, which operates in and around Binga, has been assisting its members to develop products that have the potential to perform well on the export market.”