It’s time to target regional markets

THE growth and development of economies hinge upon government policies and strategies. Governments may decide to develop viable domestic markets for industries, or take a broader outlook and pursue regional and international markets to unlock export opportunities for companies.

editorial comment

This is why President Emmerson Mnangagwa’s decision two years ago to move the department of International Trade from the Ministry of Industry and Commerce to the Ministry of Foreign Affairs got the support it did. In the modern era, diplomacy works hand-in-hand with economic planning, trade and investment. But the big change made by Mnangagwa must be twinned with real and practical action to make an impact.

In our case, industries are already struggling to find markets because local demand is depressed. Starting this programme with markets in African regions, where citizens enjoy similar customs, traditions and tastes — all important factors in determining how consumers spend — will immediately give our firms respite. This is why calls by the Confederation of Zimbabwe Industries (CZI) and the Zimbabwe National Chamber of Commerce (ZNCC) for government to help domestic industries expand into the region were pertinent. They cannot do it alone. But many times, examples have demonstrated that where governments lead the way, companies can easily follow, penetrate and grow markets. Zimbabwe has already witnessed a good example of how politics can help companies. In the past two years, an overflow of industrial and farming equipment has been shipped from Belarus after the two the government agreed to scale up economic cooperation. This has shown how important it is for the government to lead the way.

Stronger diplomatic ties have also spurred trade and investment between Zimbabwe and China in the past decade and also between Zimbabwe and India. Government should therefore take seriously the pleas by the two industrial bodies and utilise its strategic position in the Southern African Development Community (Sadc) and in Africa to help firms enter 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. Excursions of the same magnitude must be made within the Comesa, EAC and Sadc Tripartite Free Trade Area (TFTA) to expand the scope of the country’s exports.

But these must be supported by strong and reliable data spelling out what each and every economy expects of Zimbabwean industry. Zimbabwean companies have previously failed in the Democratic Republic of Congo, Equatorial Guinea, South Sudan, Ghana and Angola because they entered these markets with scanty knowledge. The country can ill-afford to repeat the mistakes of the past.

The advantage of focussing on regional trade first is that African countries have generally agreed to remove trade and investment restrictions in order to work together. Many restrictions have, in 90% of products within the ACFTA, been removed and trade and investment inflows will soon be seamless. As has been reported elsewhere in this edition, demand for goods in Zimbabwe is declining and firms cannot wait to venture out and seek their fortune in the region.