Zimbabwe’s foreign trade promotion body, ZimTrade, says there is a need to streamline the country’s regulatory framework as part of critical steps in narrowing the $3 billion trade deficit.
An outdated or improperly constituted regulatory framework can act as a barrier to effective trade.
ZimTrade CEO Ms Sithembile Pilime said there was need for a complete review of the country’s regulatory structure to ensure that it is not inadvertently hindering the country’s exports.
“We need to address our regulatory framework, let’s not put obstacles in the way of our exporters – non-tariff barriers we call them,” she said.
Non-tariff barriers to trade include import quotas, special licences, unreasonable standards for the quality of goods, bureaucratic delays at customs, export restrictions, limiting the activities of state trading, export subsidies, countervailing duties, technical barriers to trade, sanitary and phyto-sanitary measures, and rules of origin among others.
Ms Pilime said a macro-perspective approach to dealing with trade deficit was required.
“Of course, we have to address the issue of enablers, electricity supply, water, and quite a number of issues. We need to bring in foreign direct investment as well as local investment, a significant portion of which should go towards renewing machinery.
“We recently went to the opening of the refurbished CAPRI plant and they are now utilising 100 percent of their capacity, they have automated and they have increased their product range to refrigerators as they were only exporting freezers. So while some local firms might have the resources others need support from FDI inflows,” she said.
“A reasonable trade deficit caused by capital equipment for use of local industry is nothing really, but we can’t talk of a $3 billion deficit caused by importation of consumables.”
According to ZimTrade, recapitalisation of local industry will go a long way to raise the country’s exports into the region, which has a “strong” and “ready” market for Zimbabwean goods.
“Our products have got huge demand in the region. Some products may require a bit of adapting here and there to the intended market. But the demand is there, and companies also have to keep researching on the niches in these markets,” said Ms Pilime. – BH24.