Trade in services is becoming more important and Zimbabwe can capitalise on this.
The global development trajectory is now moving towards striking a balance between diversification, innovation and less reliance on imports, with trade in service becoming common practice.
As such, Zimbabwe stands to capitalise on an opportunity to boost foreign currency revenues through export of services.
Over the years, there has been a shift from economies that are primarily based on agriculture and extractive sectors such as mining, timber, gas and oil to economic expansion fronted by development of service sectors.
The services sector is made up of companies that earn revenue through providing intangible products such as retail, banking, insurance, education, computer services, communications, recreation, transport and logistics among others.
Today, major economies such as Japan, Singapore and Hong Kong are driven by a growing services sector.
According to the Trademap, the global trade in services was US$5,8 trillion in 2018, which is 61 percent increase from the 2009 statistics.
The International Trade Centre reveals that services constitute the largest sector in the global economy, accounting for 70 percent of Global Gross Domestic Product, 60 percent of total global employment and 46 percent of global exports measured in value-added terms.
These figures show that the world is experiencing a radical shift towards trading of services, with countries such as India and Sri Lanka breaking the conventional trajectory by heading straight to services without developing a significant manufacturing sector at all.
In this global shift towards service sectors, Zimbabwe has not been left alone. The services sector in has been growing in both scope and scale over the years.
Statistics from Trademap indicate that in 2018, Zimbabwe’s trade in services amounted to US$502 million which is a sharp increase of 104 percent compared to the 2009 figure of US$245 million.
The figures may be higher, because, the nature of some services might not have been accounted for statistically.
The country has also been witnessing an increase in export of services, especially to countries in the southern African region.
For example, in 2016 when the Namibian Ministry of Education, Arts and Culture advertised teaching posts to citizens of the Southern African Development Community (SADC), Zimbabwe was presented with a window to export trained professionals to assist in developing the education sector of the country and generate foreign currency through remittances arising from these diaspora professionals.
This followed a proposal presented to Cabinet in 2012 by the Ministry of Health and Child Welfare seeking to formalise the export of nurses to other countries such as Swaziland, Lesotho and Trinidad and Tobago.
The proposal by the Ministry of Health and Child Care spelt out how the country will earn much needed foreign currency through taxes and remittances by these health professionals.
These are only a few cases showing the potential available in export of these essential services.
Given these developments, Zimbabwe has potential to earn more through export of services.
According to Trademap, Zimbabwe’s service exports in 2017 were 47 percent commercial services, 21 percent transport, 19 percent travel, 6 percent Government services and 2 percent ICTs with the remaining 5 percent split among other services.
There is, however, scope to grow the country’s service exports through creating an enabling environment for transfer of, for example, labour, and its smooth movement across borders.
The facilitation of local service provider companies from Zimbabwe, to participate in tenders of service provision within the SADC and COMESA region countries is one way to explore, in driving trading of services across borders.
Due to the nature of some of the activities in the service sectors such as banking, media and communication, there is need to develop supportive infrastructure, particularly information and communication technologies which would make it easy for Zimbabweans to provide services to other countries whilst seated in their local offices.
In addition, Zimbabwe has a decent pool of qualified civil engineers, architects, surveyors and construction experts that can provide construction and civil engineering services to other countries in the region and beyond.
Current opportunities for Zimbabweans in the construction and engineering include the Kenya Konza Technology Smart City where of US$14,5 Billion will be invested in developing infrastructure of the planned city.
This means that Zimbabwean construction and engineering consulting firms should start developing and positioning themselves to be subcontracted for parts of such projects.
To assist local companies, tap into other markets such as the Kenya Konza Technology Smart City, ZimTrade, the country’s trade development and promotion organization, is working with German-based Senior Experten Service to prepare the construction and engineering sector players for international competitiveness.
Other opportunities for the sector exist in Sadc States such as DRC, Mozambique, Angola and Zambia, where Zimbabwe already enjoys free trade under the bloc’s trade protocols.
The education sector offers further opportunities for increasing Zimbabwe’s trade in services, with easy wins such as exports in study materials and online learning targeting foreign students.
This can benchmark and model around existing frameworks used by leading online institutions such as University of South Africa which services over 130 countries globally.
Riding on Zimbabwe’s reputation as producer of leading African scholars and its highly educated population, ZimTrade has embarked on a partnership with local universities on various areas of collaboration including linking with foreign learning institutions to strengthen their curricular and making them competitive on the global knowledge market.
In addition, with internet becoming faster, marketing and communication services such as operating a remote Regional Call Center for global giants is another potential service that Zimbabwean companies should consider.
Local companies can operate an independent call center, outsourcing the handling of large customer-bases for telemarketing, research, and offering customer support and handling queries.
Zimbabwe has a ready pool of professionals from various disciplines, with the available skills in unemployed graduates, which are synonymous with call center jobs.