Africa’s development must be driven by home-grown solutions.
This is one of the key messages that has been consistently delivered by His Excellency, President E.D Mnangagwa at high-level forums on the continent and across the world.
Here, the emphasis has been that the development of Africa as a continent, which must start with addressing challenges affecting its economies, must be championed by African nations.
For example, speaking at the Africa Investment Forum held last year, President Mnangagwa emphasised the need for the continent to look inward for solutions to its challenges.
“The development of a country should not be determined from outside; it should be an internal priority in terms of the order of development.
“Before we spend time addressing the perception of the outside, it is necessary for us as Africa to integrate ourselves, understand ourselves as a continent, share what we have in terms of resources.
“Africa has abundant resources,” President Mnangagwa said.
True to this cause, the Second Republic has, over the past years, geared-up its engagements with African countries to forge partnerships that will result in improved intra-African trade, which undoubtedly will solve some of the challenges undermining the development of the continent.
One of the areas that has been at the centre of engagements between the Government and other African countries has been the need to strengthen intra-continental trade, which continue to undermine economies on the continent, especially on developing regional and continental value chains.
For the longest period, African countries have been trading more with other continents than amongst themselves.
This is not sustainable.
Thus, the transactional diplomacy agenda, being spearheaded by the Government through the Ministry of Foreign Affairs and International Trade is transforming Zimbabwe into a strategic trade partner on the continent, riding on opportunities that are being created by the continent-wide trade agreement.
Further to this, ZimTrade – national trade development and promotion organisation has strengthened and expanded trade promotion activities to cover all areas of Africa.
For example, ZimTrade is facilitating for over 30 local companies to participate at the 3rd edition of the largest trade exhibition on the continent, the Intra-Africa Trade Fair, scheduled for November in Egypt.
At the trade fair, local companies will engage with leading distributors from across the continent, with the focus on increasing the footprint of Zimbabwean products on the African continent.
This activity complements ongoing programmes to create a link with local exporters and buyers from Africa.
On 18 October, ZimTrade has facilitated for buyers from countries such as Ghana, Angola, Mozambique, and Democratic Republic of Congo, to engage local companies and conduct company visits as part of the Buyers Seminar, which precedes the Annual Exporters Conference to be held on 19 October in Harare.
The buyers will engage in business-to-business meetings with suppliers of the products such as fast-moving consumer goods, fresh fruits and vegetables, agriculture inputs and implements, mining supplies and engineering.
Through the implementation of these activities, local companies are tipped to benefit from the continent’s single market, the African Continental Free Trade Area (AfCFTA).
Africa’s single market
AfCFTA brings together all 55 AU Member States, covering a market of more than 1.2 billion people, including a growing middle class, and a combined Gross Domestic Product (GDP) of more than US$3.4 trillion.
Projections are that an integrated Africa, which will come through the solutions provided for by the AfCFTA, will see the volume of total exports growing by almost 29 percent relative to business as usual by 2035.
This will make African countries more competitive, create new opportunities for African manufacturers and workers, which will see around 68 million people lifted out of poverty by 2035.
For Africa to turn its economic gains into sustainable growth and shared prosperity, the African Development Bank notes that the continent’s “public and private sectors must work together to connect the continent’s markets, deepen regional integration, and adopt reforms that enhance competitiveness.”
As the country takes an aim at harnessing business opportunities available on the continent, it is perhaps important to understand the current nature of Africa’s trade, especially intra-trade.
Africa importing from Africa
Statistics available on Trade Map shows that there has been little intra-Africa trade, compared to what countries have been trading with the rest of the world.
In 2022, the value of products imported by African countries from other African states was around US$81,9 billion, up from US$61,9 billion in 2020.
This is against the total import bill of US$694,5 billion of Africa, of which the bulk of imports came from other continents.
When looking at trade balance alone, it seems there is room for Africa to be self-sustaining in terms of its requirements, especially if value addition takes place within the continent.
Statistics show that Africa’s total exports in 2022 were US$661,4 billion, against total imports of US$694,5 billion.
As the long-term target is for the continent to be self-sustaining in meeting its requirements, its is encouraging that the value of intra-African trade has been growing, which should continue as more countries implement AfCFTA.
Top exporting African countries that are supplies markets on the continent are South Africa (US$ 28,1 billion), Egypt (US$6,4 billion), Nigeria (US$6,1 billion), Côte d’Ivoire (US$4,3 billion), Morocco (US$3,8 billion), Tanzania (US$2,5 billion), and Zambia (US$2,4 billion.
These figures demonstrate that Zimbabwe can significantly grow its exports by focusing on African countries, which should be easy to land products riding on bilateral and multilateral trade agreements, as well as advantages related to logistics.
Regional markets have been contributing towards the development of exports for countries such as South Africa, Zambia, and Tanzania.
For example, leading importing markets for products from South Africa last year were Mozambique (US$5,8 billion), Botswana (US$4,7 billion), Namibia (US$3,5 billion), Zimbabwe (US$3,2 billion), Zambia (US$2,7 billion), according to Trade Map direct data.
Other top importing markets from South Africa are Eswatini (US$1,6 billion), Democratic Republic of Congo (US$1,5 billion), and Lesotho (US$1,5 billion).
Some of the top products exported by South Africa into the continent include mineral fuels and mineral oils; iron and steel and their articles; electrical machinery and appliance; beverages, spirits and vinegar; fertilisers; soaps and detergents; and essential oils and resinoids.
Zambia has also been growing the presence of its products on the continent over the past few years, exporting products worth around US$3 billion in 2022, up from US$1,8 billion in 2018.
Top products exported by Zambia into Africa include sulphur, cement and lime; mineral fuels and mineral oils; copper; iron and steel; beverages; fertilisers; sugars and sugar confectionery; and soap and organic surface-active agents.
Trade Map direct data shows that the top importing country for Zambian products last year was Democratic Republic of Congo (DRC), taking products worth around US$1,6 billion, up from US$865 million in 2018.
Other top importers of Zambian products on the continent last year were South Africa (US$269 million), Zimbabwe (US$265 million), and Namibia (US$117 million).
Equatorial Guinea is also an emerging market for Zambia, having imported products worth around US$637 million last year, comprising largely of copper, iron and steel, cereals, and tobacco.
Tanzania has also significantly grown its exports to other African countries, from US$1,07 billion in 2018 to US$2,5 billion in 2022.
Top importers of products from Tanzania last year were South Africa, Kenya, DRC, Uganda, Rwanda, and Burundi.
Low hanging fruits for Zimbabwean businesses
The continent-wide free trade area presents immense opportunities for local businesses to diversify their exports as well as opens better access to raw materials from the rest of Africa.
First, Zimbabwe enjoys favourable climatic conditions which is suitable for production of a variety of plants.
Local businesses can fully utilize this advantage to specialize on niche products for exports.
Horticulture remains one the key foreign currency earners for Zimbabwe and is a low hanging fruit that can be used by local businesses to establish and increase market share other countries.
Value addition for horticulture produces would also ensure that local enterprises maximize on revenue, as processed products earn more than raw materials.
Zimbabwe has some of leading value-added products such as cordials and other soft drinks that are in demand across the globe.
These could be used as key products to support growth of export earnings.
Other sectors that can support the key products are clothing and leather.
Zimbabwe has one of the best cotton in the world and used to produce and export fabric across the world in the past.
Support to the cotton value chain which promotes value addition of our cotton is one of the interventions that can be done to prepare Zimbabwe to benefit from this continental trade agreement.
Further to this, Zimbabwe currently has abundant raw hides that can be value-added through processing into various leather products.
Currently, there are eight tanneries in Zimbabwe, and these can produce leather products for exporting into the region, whilst setting up pace to supply the rest of the continent.