ZAMBIA remains Zimbabwe’s top export destination with 26 percent of the local manufacturing companies exporting value-added products to the neighbouring country, official data shows.
In the 2018 manufacturing sector report released by the Confederation of Zimbabwe Industries (CZI) in Harare last Friday, the industrial representative body also indicated that capacity utilisation in the manufacturing sector increased by 3,1 percent to an average of 48,2 percent.
The report covers the period August 2017 to August last year.
“In 2018, Zambia had the lion’s share of the export market for locally manufactured products with 26 percent of the companies exporting to that country.
“Zambia is an attractive export destination for local products because products are invoiced in United States dollars,” reads part of the report.
In 2017, Zambia was also the top export destination for locally manufactured products receiving 28 percent of the manufacturing share of exports.
CZI in the report also highlighted that Malawi was the second major export destination claiming 19 percent market share last year while Zimbabwe’s largest trading partner, South Africa came third at 14 percent from second position in 2017 when it accounted for 19 percent share of exports.
The industrial representative body attributed the failure by some companies to export to lack of competitiveness by local products on the international market, high costs of production, as well as that some products were tailor-made for the local market.
In a telephone interview, CZI president Mr Sifelani Jabangwe yesterday said there was a need for the country to consolidate its relations with Zambia with regards to exports so that more locally produced valued added products find their way into the neighbouring nation.
“We need to strengthen our relations with Zambia in terms of exports so that more locally value-added products get into that market thereby enhancing foreign currency generation for the country,” he said.
Mr Jabangwe said although South Africa remains Zimbabwe’s biggest trading partner, CZI was concerned over that country’s intention to revoke the 1964 Trade Agreement which made it easy for locally-manufactured products to find their way into the neighbouring.
“We are concerned that South Africa despite being our largest trading partner has indicated plans to cancel the 1964 Trade Agreement which made it easier for us to access that market.
“The cancellation of that trade agreement will have serious repercussions for our import bill as it will be difficult for locally value-added products to access that market while most of our equipment and raw materials are predominantly sourced from that country,” he said, adding that responsible authorities should engage South Africa to thwart the cancellation of the trade agreement.
The manufacturing sector contributes a significant proportion to the country’s Gross Domestic Product averaging about 12 percent.
Last week, Industry and Commerce Minister Nqobizitha Ndlovu said between January and December 2018, the Government allocated a cumulative $1 billion representing a two percent growth on allocations through the Reserve Bank of Zimbabwe towards supporting the manufacturing sector.
The CZI manufacturing sector survey for the period under review showed that capacity across various sub-sectors dipped in November after Government suspended Statutory Instrument 122, which restricted importation of certain products.–chronicle.co.zw