Zimbabwe continues to ‘put its eggs in one basket’, with dependence on South Africa for export receipts increasing in 2016 compared to the previous years. In 1992, 63% of Zimbabwe’s total exports was spread across ten markets, compared to 2016, when 79% of exports were destined to South Africa only.
Zimbabwe Trade Compas
The ratio of Zimbabwean exports to South Africa to Zimbabwe’s total exports has been on an upward trend, rising from 14% in 1992 to a peak of 79% in 2016. In addition, between 2012 and 2016, around 90% of Zimbabwe’s exports to South Africa constituted commodities such as unmanufactured tobacco and minerals (platinum group of metals (PGMs), gold and nickel), among others.
Given that South Africa is a natural and strategically key partner for Zimbabwe on both the export and import fronts, Zimbabwe should move towards the export of more value added manufactured products and away from unprocessed commodities.
The country should take advantage of its membership in SADC and COMESA (preferential trade areas), to reduce its export market concentration ratio and improve trade with other players in these trading blocs. Both blocs have the potential to absorb Zimbabwe’s exports (which amounted to US$2.8 billion in 2016), given that their 2015 import bills were over US$160 billion and US$180 billion, respectively.
A lower product and market concentration reduces a country’s vulnerability to external economic shocks when there are negative developments in the global market. In the same light, dependence on a single market puts a country at risk, as effects of any changes that may take place in that market may filter through to the exporting country. For example, the depreciation of the South African Rand against the US dollar between 2013 and 2016 resulted in Zimbabwean products becoming less competitive in the South African market.
In an effort to energise the country’s export growth, the ZimTrade has been focusing on facilitating market and product diversification in the region through conducting market surveys. Furthermore, the organisation offers market intelligence, facilitates local companies to participate in regional trade fairs, inward and outward buyer missions, as well as expos. These activities have been conducted in countries such as the DRC, Tanzania, Namibia, Angola and Zambia, among others.
Publish Date: Tuesday 04 April 2017
