Zimbabwe’s foreign policy has taken a paradigm shift under President Mnangagwa administration, with a focus on re-engagement and economic diplomacy.
Following years of isolation, the President has been clear – through the Zimbabwe is Open for Business mantra – that improved economic relations with the rest of the world will unlock economic gains through increased trade and movement of investment and capital into the country.
The National Development Strategy 1, launched by President Mnangagwa last year already identifies the current drive towards economic diplomacy as having “huge potential to improve the country‘s image, strengthening cooperation with the international community, thus improving economic recovery growth prospects.”
To realise quick wins from the economic diplomacy agenda, local companies must revitalize trade relations with regions and countries that have huge potential for Zimbabwean products, based on previous trade patterns and current opportunities.
The European Union (EU) is one of the regions that remains a key market for Zimbabwean products and services.
According to Trade Map, Zimbabwe exports to EU 28 in 2001 were around US$795 million and although the current exports to the same market have dropped to US$414 million, there is huge potential for local exporters to surpass previous records.
Local companies can capitalize on the size of the EU market, which boasts of over 500 million consumers with a share of around 20 percent of global imports and exports.
Further to this, the EU is the fastest growing market for organic and super foods, which further offers opportunities for Zimbabwean farmers, including smallholder farmers practicing organic agricultural practices.
Zimbabwe already holds a reputation as a source of quality and reliable products and local companies can capitalize on this to increase exports to that market.
Current Zimbabwe’s top export products to EU – which could inform the basis for increased exports – include tobacco and manufactured tobacco substitutes; minerals; iron and steel; fruits, vegetables and nuts, furniture, tea and coffee, textile and clothing.
However, what is most important for local exporters to increase exports is taking advantage of existing trade requirements and complying with market requirements.
Zimbabwe-EU trade agreement
Zimbabwe, together with Mauritius, Madagascar, and Seychelles, signed an interim Economic Partnership Agreement (iEPA) with EU targeted at making it easy for exporters to penetrate the European market.
The agreement offers duty free and quota-free market access to local exporters.
The iEPA targets removal of tariffs and other trade restrictions on qualifying goods between EU and Zimbabwe.
The tariff offers for Zimbabwean exporters involve gradually opening their markets to EU imports over a 15-year period, with some exceptions for sensitive products.
The basic approach used in the agreements for determining a qualifying product is that it must be wholly produced locally from local materials, or at least have been substantially transformed locally, based on the respective qualifying criteria that are specified at the product, category, or sector level as applicable.
Following the signing of the agreement in 2009, Zimbabwe’s exports to the EU (27) have been on an upwards trend, from around US$282 million recorded in 2009 to US$398 million recorded in 2020, according to Trade Map.
Zimbabwe’s exports to the EU continue to enjoy the privileged duty-free, quota-free access, this presents a great opportunity for the Zimbabwean business community.
As such it is important that local exporters keep abreast with trade requirements in the EU for conformity, particularly buyer requirements and statutory obligations.
Buyer requirements refer to all the demands that must be met before a buyer can take products or services from Zimbabwe.
On the other hand, the EU is bound by both legal and non-legal requirements, affecting nearly all food and non-food products including furniture.
Legal requirements are the minimum requirements which products marketed in the EU must meet and all products that do not meet these requirements are denied entry into the EU market.
On the other hand, non-legal requirements go beyond legislation, and they are concerned with additional requirements such as environment and social requirements.
There are several standards that have been put in place to govern importation of products and services in the European market.
Using these standards reflects on the quality, safety and reliability of products and improves the performance of products in the market.
Although standards are voluntary in most cases, there are some requirements that are mandatory for those looking to export to the market.
In Europe, three standardisation organisations are responsible for establishing general requirements for products and services.
These are European Committee for Standardisation, European Committee for Electrotechnical Standardisation, and European Telecommunications Standards Institute.
At national level, standardisation is managed by national standardisation bodies who adopt and publish national standards.
Thus, it is important for local companies to work closely with their buyers or partners in the market as they have better understanding on applicable standards and requirements.
Local exporters can also approach ZimTrade – the national trade development and promotion organization – to access their market information services and obtain key insights into market requirements in the Europe and other markets.
As an example, Conformitè Europëenne (CE) marking is required on most products before they can be sold in the EU market.
This legislation requires manufacturers to display CE marking on their product, packaging, and accompanying literature.
Other quality standards and statutory requirements are based on the specific product to be exporters.
For example, exporters of furniture products to the EU must ensure their products are of excellent quality, that is, well-dried, free from pests, free from cracks or splitting and from fully grown trees.
Packaging and labelling have become increasingly of concern for all imported products in EU.
Deliveries from developing countries, Zimbabwe included, generally have a long distance to go before reaching their destinations, hence close attention should be paid to water-resistant and solid packaging.
Basic elements for exporting to the EU
1. The exporters should strive to use environment friendly materials and latest technologies for the manufacture of their products and their packaging and packing.
It would be desirable to study the regulations of the EU as regard to environment protection and conduct life cycle assessment of the product to ensure eco-friendly nature of the materials through all the stages of the life cycle of the product.
2. The importers are highly quality conscious, and the exporters can gain the confidence by exporting products whose quality has been ensured through the quality assurance system as certified under ISO 9000 series of standards.
3. Price competitiveness is a crucial factor to gain an edge over the competitors in the EU.
4. Participation in trade fairs can be the best strategy to enter the EU markets.
ZimTrade facilitates participation of local companies at trade exhibitions in EU and companies planning to increase exports to the market should utilize these services.
5. The exporters should ensure regular flow of information to the European buyers.
There is a need to ensure prompt replies to the queries of the importers.
ZimTrade has developed Shop@Zim, an online platform to improve linkages between local exporters and buyers from across the world.
Local companies are encouraged to list their products and services on the platform as this will improve the visibility of their offerings beyond the borders.
6. The exporters should show utmost respect for the export contracts, that is, the exporters should comply with the commitments as regard supply of goods on scheduled delivery dates, quantities, and price. They should not be dishonest while agreeing to the terms of delivery or the quality of the goods.
7. The exporters should understand the regulations of the EU as regards public health and safety.
As part of its market information services, ZimTrade can assist local exporters in understanding these and all other requirements in the EU.