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Business Writer

THERE is an urgent need to transform the productive sectors of the economy towards export orientation and international competitiveness with much focus on value-added exports.

With robust export development and promotion strategies aimed at value addition and beneficiation, the country will wean itself from exporting primary products.

This came up during a one-day business export seminar in Harare whose thrust was to provide an opportunity for local businesses to learn about the latest trends in export markets, appreciate the export value chain and how they can take advantage of these trends to grow their businesses.

The seminar was organised by the People’s Own Savings Bank (POSB) in partnership with ZimTrade.

The National Competitiveness Commission (NCC) executive director, Mr Philip Phiri said the export sector which contributes about 60 percent of Zimbabwe’s foreign currency earnings annually, ahead of diaspora remittances, loan proceeds and Foreign Direct Investment (FDI), remain the most sustainable source of foreign currency and important driver for economic growth and development.

“However, of concern is that the country continues to rely heavily on a narrow range of primary products for exports dominated by minerals and agriculture products, which are susceptible to price commodity volatility.

“This low level of export diversification, limited value addition and beneficiation contributes to low competitiveness edge among the comparator countries,” he noted.

“For instance, the country’s share of manufactured exports of about eight percent is way below regional competitors such as Botswana (23 percent), Namibia (26 percent), South Africa (38 percent) and Zambia (10 percent), among others.”

He said high transportation costs, regulatory bottlenecks on export business, a stronger United States dollar currency and the erratic supply of utilities make Zimbabwean products relatively more expensive and less competitive on the export market in the region and internationally.

Added to that, limited access to and high cost of trade finance and limited incentives have also been identified as notable contributing factors.

“To this end, robust export development and promotion strategies aimed at value addition and beneficiation, through strengthening mineral and agricultural value chains, reviewing the legislative environment and provision of key enablers, are therefore, critical to transform the productive sectors of the economy towards export-orientation and international competitiveness with much focus on value-added exports.

Mr Phiri said as the country gears towards the attainment of the set export targets, the Micro, Small and Medium Enterprises (MSMEs) sector should not be overlooked.

“MSMEs contribute up to US$8,6 billion (60 percent) to GDP and the sector is highly informal with only 14 percent formalised,” he said.

POSB chief executive officer, Mr Garainashe Changunda said one of the financial institutions’ mandates is to promote exports to boost the country’s foreign currency generation efforts and economic growth.

“We understand the impediments that businesses face when it comes to exporting their products. 

“We support exporters through our financial and non-financial services, including trade finance, foreign exchange services, export credit facilities such as pre-export loans, offering foreign payment solutions including Mastercard Services and provision of export documentation services such as form CD1 which is the passport for physical goods and form CD3 for transport services, general services declaration forms (DSD), among others,” said Mr Changunda.

He added that exporters play a pivotal role in the economy as they help create employment, increase foreign exchange earnings and contribute to the country’s economic growth.

“Zimbabwe has enormous export potential and POSB is committed to helping businesses take advantage of these opportunities,” said Mr Changunda.