ZIMBABWEAN industries are pushing for stronger regional integration efforts to help them bolster fresh forays into the African markets.
In separate papers submitted to government, the Confederation of Zimbabwe Industries (CZI) and the Zimbabwe National Chamber of Commerce (ZNCC) said companies can still redeem lost opportunities at home by targeting stable economies to generate foreign currency and build fresh capacities.
The CZI said these regional markets include the African Continental Free Trade Area (AfCFTA), which cuts across a region with 1,2 billion consumers and a US$3,2 trillion gross domestic product (GDP).
They also want President Emmerson Mnangagwa to scale up integration and help domestic firms open up markets within the Common Market for Eastern and Southern Africa (Comesa), East African Community (EAC) and Sadc Tripartite Free Trade Area (TFTA).
AfCTA has specific provisions compelling member states to remove tariffs from 90% of goods entering their markets, potentially unlocking new markets for Zimbabwean firms, which have struggled to ride over a tough phase with high inflation, foreign currency shortages, a volatile exchange rate and a blazing power crisis.
This crisis could see GDP declining by up to 20% this year, according to official statistics, with industrial capacity utilisation falling to 27%, from 48% last year.
“The country should participate meaningfully in the regional and international economy and take advantage of AfCFTA and TFTA,” the CZI said in its paper.
“Opportunities for synergies with all neighbouring countries to establish One-Stop Border Posts and enhance efficiencies and collaboration need to be executed to improve flow of trade.
External inflows decline where manufacturers see profitability by selling locally. This is because local products are not price competitive. One of the key measures to ensure export competitiveness is to allow all raw materials to be imported duty free…to enable locally manufactured goods to compete with imports as well as to compete in the export markets,” the CZI said.
It called for the establishment of supporting institutional frameworks that will ensure cheap raw materials are sourced in Zimbabwe.
The CZI said government must review punitive export proceeds regulations such as penalties for delayed receipts or repatriation of export proceeds, including mandatory liquidation after defined periods.
Its paper was followed by an advisory by Morgan&Co, which demonstrated how declining demand had suffocated a few big firms still operating in Zimbabwe.
“In Zimbabwe, the decline in economic activity has shrunk the opportunity set for many entities that have now become too big for the current operating environment,” Morgan&Co said in a market intelligence report.
“There are now less opportunities to grow and sustain operations given shrinking consumer wallets and a regionally uncompetitive operating environment base in most sectors which limits exports,” it said.
In a separate paper, the ZNCC said government made the most important step towards improving international trade by bringing new players to the Consignment Based Conformity Assessment programme.
However, the ZNCC said more ground was yet to be covered, such as extending the One-Stop Border Post concept to Beitbridge after the success register at Chirundu
“There is a need for allocation of funds towards improving efficiency for border systems – modernise the infrastructure at ports of entry in line with changing global trends and business needs. There is a need to digitise all Zimbabwe Revenue Authority (Zimra) operations at the borders, Zimra should move to paperless operations,” the ZNCC said.
Finance minister Mthuli Ncube has said it has become imperative to expedite the transformation of Chirundu into a 24-hour operation, as freight passing through Sadc’s first one-stop port continues to rise.
At the centre of booming demand for trade facilitation has been rapid rises in mineral output in the Copperbelt, which stretches across central-southern Africa.
In addition to sharp rises in the shipment of food after poor agricultural seasons, demand for copper, cobalt and other materials produced in the Democratic Republic of Congo and Zambia is growing rapidly.
Official statistics indicate that 95 of these are conveyed through Chirundu, which operates during working hours.
This is despite its strategic positioning at the centre of the north-south corridor, which comprises an 8 600-km road network and 600 km of rail that transcends the region.