COVID-19: Implications on Zimbabwe’s exports and way forward

The coronavirus (COVID-19) outbreak has brought considerable human suffering and major economic disruption in the whole world since the first reported case in China in December 2019.

According to World Health Organisation (WHO), as of 17 March 2020 the confirmed cases were at 179,112 of which 7,426 succumbed to the disease.

Zimbabwe has not been spared, with the first two cases confirmed less than 10 days ago and a death recorded earlier this week.

This pandemic has made many countries reassess their priorities, with many sacrificing travel, trade and tourism activities as a preventative measure against the spread of the virus.

Restricted movement of persons

Governments are applauded for coming up with various stiff measures to contain the spread of the disease.

Whilst there is no better way to stop the spread of the virus than reduce movement of persons across borders, it is important to acknowledge that such tough solutions immediately affect planned economic activities.

For example, free movement of persons across borders is an enabler of increased trade and business engagements between companies of different countries.

With most countries effecting travel restrictions and many airlines cancelling flights, this will result in less inflows of business-persons interested in trade, tourism and investment in Zimbabwe.

The tourism sector has been the hardest hit by the travel bans, with tourist centers such as Victoria Falls recording the lowest tourists in more than a decade.

Investments have also been affected heavily, particularly for those that were waiting for inward meetings with potential buyers to finalize deals.

If the virus continues to spread, it is also expected to affect the Zimbabwe tobacco auction floors since international buyers will not be able to travel.

With regards to the rest of exports, there are activities that had been lined up to promote linkages between local manufactures and potential buyers.

For example, ZimTrade – the national trade development and promotion organisation – was facilitating an inward buyer mission targeted at buyers in the Zambian fast-moving consumer goods and mining sectors.

In the interest of public health and to stop the spread of the virus, the inward buyer mission had to be postponed, with potential implications on new trade partnerships with buyers from Zambia.

In addition, COVID-19 is expected to delay some trade related activities run by ZimTrade such as trade fairs (exhibitions), market surveys, inward and outward buyer missions, and PUM and SES experts capacity interventions which were planned for the year as countries continue to ban international travelling and gathering of large groups.

To reduce impacts of the travel bans, local companies must quickly come up with internet-based solutions that will make it easy to connect with potential business across the world.

Investment and trade related engagements can easily be substituted by virtual meetings, a solution that is easily understandable as the buzzword of late has been social distance.

These virtual meetings will need to be complemented by a strong online presence by local companies, where they showcase their products and provide further user assistance and contact details.

With regards to tourism, this is the high-time for players in the tourism sector to adopt virtual reality options that will allow guided tours of any place around the world.

Imagine, selling a virtual reality experience, where people across the world can have an experience of Victoria Falls or Great Zimbabwe through a simulated environment?

This can potentially revolutionise the tourism industry, especially now that most people across the world are confined to their homes, in the spirit of maintaining social distance.

Tourism stakeholder must come together and create applications that simulate the experience of visiting Zimbabwe, package them in an application and sale to potential clients around the world.

Non-movement of goods and observing of social distance

Closing of borders has been identified as one of the effect ways to curb the spread of virus, coupled with the need to observe social distance, where people work from home where necessary and restrict movements.

Countries in Africa have been adopting the same approach countries like South Africa, Rwanda and Kenya closing some of their ports and banning travelers from high risk countries.

As the number of bans within Africa increases, trade within the region is likely to be affected in the short term as counties will reduce importation.

This could have an immediate impact on demand for Zimbabwe  exports like t obacco and manufactured tobacco, salt, cotton, fruit and nuts, citrus fruit, live animals, cultured pearls, precious stones, raw hides and skins, leather, cut flowers, footwear, works of art, collectors’ pieces and antiques to Africa.

The intervention measures put in place by South Africa in combating the spread of coronavirus will be felt much by Zimbabwean exporters since it takes about 49 percent of Zimbabwe’s total exports.

This situation in Africa is almost the same across the world where Zimbabwean exports will likely be affected by restricted movements, ban of air travel or grounding of ships, which transport the bulk of the country’s exports.

According to Trade Map, Zimbabwe’s exports to Europe in 2018 were US$60 million from products such as precious stones, live trees and cut flowers, vegetables, raw hides and skins, leather, works of art, tobacco, articles of apparel and clothing accessories ,coffee, tea, maté ,spices, and fruit and nuts.

As of now Europe has become the epicenter of COVID-19 and the measures they have taken will have a negative impact on trade between Zimbabwe and Europe as some orders are expected to be cancelled.

In addition, COVID-19 has taken hold in the United Kingdom were many people are choosing to work from home and eating out less, which has led to decrease of some food prices.

The shutdown of both local and open-air markets has significantly reduced the demand for fruit and vegetables United Arab Emirates overall consumption volume is in decline.

To put figures to this, the price of mixed-quality garlic was US$1,050 per ton before the outbreak of the virus.

However, the outbreak of the corona virus disrupted regular patterns in the garlic market where the growing garlic reserve, combined with a shrinking consumer demand caused panic in the garlic market and caused the price of garlic to drop by US$300.

Whilst supply is low and, in some cases, where price is low, it is important for local exporters to concentrate on production, ensuring that they increase output, which will make it easy for them to meet demands as soon restrictions are removed.

Already, there are markets that have recorded a sharp increase in the prices of horticultural produces such as vegetables and fruits.

For example, Netherlands – which is the biggest destination of Zimbabwean horticultural exports in Europe – has experienced an increase in demand of fruits and vegetables like pineapples, oranges and apples.

This is an outcome of consumers seeking multivitamin foods rich in antioxidants to gain what they believe is a defense against the coronavirus.

The result is that prices of fruits like pineapples have increased from an average US$1.30 per kg as at 31 December 2019 to US$3.14 this month.

A severe rise in the price of some fruits and vegetables has also been reported on the wholesale markets in Bulgaria due to increase in demand for fruits and vegetables which has increased by five to ten percent.

Across major markets, the increase applies mostly to imported foods, including lemons, bananas, oranges, kiwis, mandarins, blueberries, broccoli, cucumbers, tomatoes and more.

Therefore, farmers and exporters of horticulture produce in Zimbabwe are encouraged to focus on increasing quality and quantity so that they capitalize on the higher price once markets begin to open.

What of Zimbabwe’s trade with China

COVID-19 is expected to impact China’s global trade for several months as it recorded the first case of the virus.

China is one of the Zimbabwe’s top trading partner, with Zimbabwe exporting US$974 million in 2019 according to Trade Map.

Currently, there are cases where Chinese import companies are cancelling orders due to port closures and hence Zimbabwe’s exports to the country are affected.

With China having shut down its manufacturing centres and closed its ports, there will be a resultant decrease in demand for the Zimbabwean products.

At the same time, closed borders in China means Zimbabwean manufacturers that rely on raw materials and other consumables from China will be affected and the spiral effect of reduced manufacturing in China will have a toll on Zimbabwean industries.

According to Trade Map, China is the 3rd country that Zimbabwe imports from with a total imports value of US$368 million recorded in 2019.

The major products that Zimbabwe imports from China include machinery, mechanical appliances, boilers, electrical machinery, equipment, vehicles, chemical products, rubber, and plastics.

Zimbabwe mainly imports raw materials and machinery for production purposes which will then be used to manufacture different products some of which are exported.

Going forward, it is important for local companies to start considering locally produced raw materials that can support businesses.

This can be easily achieved is stronger linkages are created between suppliers and buyers so that they can strike a balance between supplying the quality products and right prices.

This import substitution will allow the country to create employment and at the same time preserve the scarce foreign currency.

Publish Date: Thursday 02 April 2020



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