UPDATED: Gvt urged to address cost of production

12 Dec, 2018 - 13:12 0 Views
UPDATED: Gvt urged to address cost of production Delegates to the Intra African Trade Fair currently underway in Cairo, Egypt follow proceedings during the official opening on Tuesday morning

The Herald

From Sydney Kawadza in CAIRO, Egypt
Government should address the cost of production to make Zimbabwean products more competitive on both the continent and global market.

This emerged during the on-going Intra-African Trade Fair at the Al Manara International Conference Centre in Cairo, Egypt.

The IATF 2018, the first of its kind on the continent, aims to provide a platform for promoting intra-Africa trade while facilitating information exchange in the sustainable implementation of the African Continental Free Trade Agreement.

President Mnangagwa, in March this year, joined 48 other African Heads of State in signing the AfCFTA agreement in Kigali, Rwanda.

In an interview, ZimTrade chief executive Mr Allan Majuru said issues such as cost of production were inhibiting trade between Zimbabwe and fellow SADC member states.

Trade among African countries is currently around 16 percent, way less compared to China, Europe and the Americas.

“It comes back to the issue of competitiveness and when I say competitiveness I mean the ease of doing export businesses.

“When we have to supply quality goods and the cost of production is high, it’s limiting the amount of products that we can send to Zambia, Mozambique or any other African country,” he said.

The foreign currency shortages have also been affecting production in Zimbabwe.

“However, if our cost of production goes down our goods will become more competitive and we can do business with Zambia, Mozambique and Angola or in DRC because we have got the distance advantage.

Mr Majuru said Zimbabwe has been forced to rely on the South African market as it provides a port of exit for products going to the foreign markets.

“Some of the goods that we are saying we are exporting to South Africa end up in other countries but when we export they are recorded as if they have been exported to South Africa.

“The main challenge for us, I think, we need to enhance the easy of doing export business for example issues to do with procedures and processes there is need to be streamlined for us to enhance our export,” he said.

Companies and investors, Mr Majuru said, should not be spending more time trying to get the necessary documentation for them to do business in Zimbabwe. According to the World Bank annual ratings, Zimbabwe is ranked 155 among 190 economies in the ease of doing business.

Zimbabwe’s rankings improved to 155 in 2018 from 159 in 2017 with the Ease of Doing Business in Zimbabwe averaging 161.91 from 2008 until 2018, reaching an all-time high of 171 in 2011 and a record low of 153 in 2014.

The Ease of doing business index ranks countries against each other based on how the regulatory environment is conducive to business operation stronger protections of property rights. Economies with a high rank (1 to 20) have simpler and friendlier regulations for businesses.

Mr Majuru applauded the South African Government for promoting small companies in enhancing export trade.

“They have small companies which when they want to penetrate the market entry ports are met by Government so going forward Government should ensure subsidies and incentives are our companies to penetrate extra markets.

“With Government assistance, Zimbabwean companies can move forward into the export trade while ensuring a steady flow of foreign currency into the country,” he said.

The IATF 2018, being run under the theme, “Transforming Africa” which in line with the objective of AfCFTA aims at increasing intra-African trade on the Internet, B2B, also known as e-biz, the exchange of products, services or information (e-commerce) between businesses, rather than between businesses and consumers.

Zimbabwe is represented by high-powered delegation – including four Government departments, 25 companies, several parastatals and business support organisations – with Industry and Commerce Minister Nqobizitha Malanganiso Ndlovu leading the delegation.

The IATF 2018 is the first large-scale event to promote an increase in trade between African nations as per the single-African market concept detailed in the African Continental Free Trade Agreement (AfCFTA).

IATF 2018 is being organized by Afreximbank in partnership with the AU and will be hosted by Egypt’s Export Development Authority.
More than 1 000 exhibitors and over 70 000 visitors are expected to attend the week long exhibition.

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