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Growth of exports remains a priority: President

Contents

SB Moyo lays out post coronavirus plan

Lupane women confident about export growth

Market Focus: Unexploited

opportunities in the Mozambique market

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Zimbabwe’s development matrix places emphasis on the need to grow exports and increase the nation’s products on international markets. This was recently confirmed by the His Excellence, President Emmerson Mnangagwa during a ZimTrade-organised tour of Tanganda Tea Company in Chipinge. In a speech read on his behalf in Mutare on 5 June by the Minister of Defense and War Veterans, Oppah Muchinguri-Kashiri, President Mnangagwa said exports are a crucial cog in the resuscitation of the economy. “Increasing our export earnings remains one of our key priorities as we resuscitate and grow our economy,” he said. To achieve this, President Mnangagwa said there is need to take an appreciation of the multi-faceted nature of the economy.

“We are cognisant for the need of the holistic appreciation of all sectors of the economy, including the agricultural sector and associated agriculture value chain industries,” he said adding that a “well-coordinated policy support from the farm to the processing plant and to the final domestic and international markets is now imperative.” The visit to Tanganda Tea Company is part of the activities that are lined up to support the establishment of export provincial clusters across the country. The Manicaland Province, where Tanganda Tea Company is based, is earmarked to be a horticultural hub, given the competitive and comparative advantage the province is endowed with. To ensure the strong systems within the provincial export clusters, President Mnangagwa reiterated the need for a coordinated approach among all

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Disclaimer:” Disclaimer: ZimTrade strives to compile reliable, research-based information that is passed on to our readers in good faith. However, ZimTrade does notaccept any responsibility for the accuracy of the information supplied, nor does it guarantee the status or reliability of any third party included in the Newsletter.Similarly opinions expressed by third parties in abstracts and/or interviews are not necessarily shared by ZimTrade. For more information about ZimTrade and its activities log on to www.tradezimbabwe.com”

“We must have signature products, which will rebrand Zimbabwe as a key export economy.” Further to this, improvements in the logistics for products destined to regional as well as international markets will also complement efforts to grow exports.

SB Moyo lays out post coronavirus planThe Minister of Foreign Affairs and International Trade, Hon Lt. Gen. (Rtd) Dr S. B. Moyo has indicated that the product diversification will see the country grow exports in the post coronavirus period. Although the coronavirus (COVID-19) pandemic has had negative impacts on supply and demand chains, Minister Moyo indicated that there is need to target the envisoned 10 percent growth in exports per year. Speaking during the Government’s familiarisation tour of Tanganda Tea Company in early June, Minister Moyo said expectations are that the country diversify export products, which will see improved exports. To achieve this growth, the country needs to leverage on already performing sectors, such as the agro-produce sector, which can be developed into a leading export sector. “We believe that agro-produce has the potential to become the leading export sector for Zimbabwe. “A very concerted effort is therefore needed to ensure that Zimbabwe firmly re-establish itself as a an agro-based export economy able to feed itself, the region and wider world.” The Minister urged local companies to utilise the African Free Continental Trade Area (AfCFTA), which will increase the presence of Zimbabwean products on the export market and address the current trade imbalances. “The balance of trade is negative to Zimbabwe,” he said, adding, “That is unacceptable.” Hon. Moyo indicated that expectations are that ZimTrade, Government Ministries and Private

Sector “should be able to turn around that position and recapture those markets”. The Minister also indicated that the growth of exports will be support if Zimbabwe develop’s signature products, which will drive the brand of the country.

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What they said at the tour of Tanganda Tea Company

Minister of Lands, Agriculture, Water and Rural Resettlement - Rtd Chief Air Marshal P. Shiri

• His Ministry is promoting the outgrower and anchor farm schemes

• Tanganda can be a good anchor farm for macadamia and av-ocadoes

• The government is working on commercializing the agriculture sector by focusing on high value cash crops.

• Each province should have its own agricultural produce for ex-ports.

• Companies should also make sure that they have their prod-ucts at embassies as a means of promoting exports

• His ministry will to address theft of Macadamia by engag-ing relevent stakeholders

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ZimTrade Board Chair

• ZimTrade has premised its strategy on the Gha-naian model which seeks to have every district exporting at least one product.

• ZimTrade is opening an office in Mutare and this is part of a gradual strategy which is meant to end up with a ZimTrade office in every province.

• ZimTrade is also lobbying for the designa-tion of Chipinge and Honde Valley areas as Agro-Special Economic Zones

• ZimTrade is working on creating a National Trade Brand and that the food related sectors are a low hanging fruit.

• Tanganda Tea Company Managing Director - Timothy Fennell

• Tanganda started its diversification drive about 10 years ago

• The target was on export crops that would give them a 12-month cashflow cycle

• They are planning to start an avocado out grower scheme

• They have also commenced working on solar project. Their first 1.8 megawatt plant is at 80 percent completion with two similar plants to be installed by December 2020.

• He reassured that Tanganda is going to be in-volved in the resuscitation of roads to facilitate movement of their products

• He requested assistance in coming up with trade protocol for avocados and other prod-ucts specifically for the Chinese, Japanese and Indian Markets.

Manicaland Minister of Provincial Affairs- Dr. Ellen Gwaradzimba

• The province has a lot of agricultural activities and lots of horticultural produce. However, the biggest challenge is post-harvest losses due to poor infrastructure as well as marketing struc-tures.

• She highlighted that Manicaland be granted Special Economic Zone status because of the export potential of the area

• She also urged stakeholders in Chipinge to come up with a community share ownership trust where companies like Tanganda will con-tribute towards the maintenance of common in-frastructure such as roads

• The Minister urged macadamia growing com-panies to engage communities in areas of con-flict and mutually map the way forward.

• While urging ZimTrade to work with AMA, she also reaffirmed her support in opening a Zim-Trade office in Mutare.

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“Basketry can even give you one billion dollars.” Although the figure might seem far stretched considering the country’s exports, the Director of Lupane Women’s Centre, Hildegard Mufukare, remains confident the country can harness potential within rural communities to grow exports. Talking to ZimTrade recently, Mafukare highlighted that Zimbabwe has potential to grow exports from the arts and crafts sector and tap into the growing global market for basketware. According to Trade Map, the global import bill of manufactures of straw, of esparto or of other plaiting materials; basketware and wickerwork grew from US$1.81 billion in 2016 to US$2.1 billion in 2019. To tap into that market, Mafukare noted the need to for closer linkages between the Zimbabwean diaspora and rural business, which will ride on the former supporting initiatives within communities they grew up in.

“Communities look forward to support from people who were raised within those community, especially those that have left the country. “So, we need to establish mechanisms and process through which people who have left our communities can give back by promoting local products abroad,” she said. Such an arrangement, she said, will create stronger social structures that

will see women being supported by a sustainable system of survival and in turn do away with handouts that are currently affecting their production capacities. The Lupane Women’s Centre is training, information and marketing place for the women who are involved in the various weaving and related projects. The Centre boasts of a membership of more than 4,500 members, the largest number of organised

Lupane women confident about export growth

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weavers in the country. Of the total members, more than 420 hundred are successful weavers who supply both domestic and international markets. Mafukure however noted that the Centre has potential to contribute meaningfully to national exports if current challenges affecting production and exports are addressed. She noted that currently there are price distortions because of increased activities by middlemen, which have affected earning for rural women. “Because of the current economic challenges and difficulties in accessing some international markets, some middlemen are taking advantage of that and

negotiate a price that is not sustainable.” The result is that women are forced to sale their commodities at very cheap price and this has ripple effect on production and nation’s earnings. The logistics and freight support is another challenge that is affecting distribution of pieces from Lupane to all parts of the world. The current fees are making, for example, baskets weaved in Lupane uncompetitive, living room for products from countries such as Zambia and South Africa to seize markets. To address these challenges, ZimTrade is identifying international buyers that have potential to import directly from

Lupane, thereby cutting out the middlemen who are usually resident in Harare and Bulawayo. Development of a mobile application, which will create a direct connection between international buyers and weavers in Lupane is also at an advanced stage. Once operational, the Lupane Women’s Centre should be able to advertise their products on the platform, engage in business to business meetings with buyers and conclude business deals. With regards to freight challenges, ZimTrade is engaging service providers to offer favourable terms to women in Lupane so that they export at uncomplicated and less costly terms. There are also plans to assist rural communities in standardisation as this will make it easy to consolidate orders. Already, there are buyers who have expressed interest to source from Zimbabwe. However, they have requested for large orders that can be easily met if all players produce a homogeneous product and consolidate orders.

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Arts and crafts have been trivialised in the economic discussion in Zimbabwe for a long time. Interesting statistics from leading economies show that the arts contribute US$763.6 billion to the United States of America’s economy, more than agriculture, transportation, or warehousing. The arts employ around 4.9 million workers across the country with earnings of more than US$370 billion. Arguably, art influences society by changing opinions, instilling values, and translating experiences across space and time. Research has shown art affects the fundamental sense of self. For example, painting, sculpture, music, literature, and the other arts are often considered to be the repository of a society’s collective memory. Art connects a country to another country, people to people. Even when language is not known, art can explain the entire story. Although with such potential, the arts and crafts sector regrettably remains marginalised. Currently, governments, schools, and other non-profit organizations

are engaged in critical budget decisions that may affect our economic development success. The assumption is that arts and crafts are dispensable extras. Research however suggests, that disposing of arts and crafts may have negative consequences for the country’s ability to produce innovative scientists and engineers who invent patentable products and found new companies. A study of Michigan State University Honors College science and technology graduates (1990-1995) yielded four striking results: a) graduates majoring in science, technology, engineering, and mathematics (STEM) subjects are far more likely to have extensive arts and crafts skills than the average American; b) arts and crafts experiences are significantly correlated with producing patentable inventions and founding new companies; c) the majority believe that their innovative ability is stimulated by their arts and crafts knowledge; and d) lifelong participation and exposure in the arts and crafts yields the most significant

impacts for innovators and entrepreneurs.Cultural and creative industries, which include arts and crafts, advertising, design, entertainment, architecture, books, media and software, have become a vital force in accelerating human development. They empower people to take ownership of their own development and stimulate the innovation that can drive inclusive sustainable growth. If well-nurtured, the creative economy can be a source of structural economic transformation, socio-economic progress, job creation and innovation while contributing to social inclusion and sustainable human development. It is thus not by chance that the 2004 UNDP Human Development Report makes a case for respecting diversity and building more inclusive societies through policies that recognize cultural differences and multicultural perspectives. Cultural and creative industries (CCI) are generally inclusive. People from all social classes from the indigenous to the elite participate in this economy as producers and consumers. Work in the sector tends to favour youth and women compared with other sectors. For example, a 2015 UNESCO publication highlighted that CCI sectors in Europe typically employed more youth than any other sector. A recent UNDP/HDRO paper also shows how women play a dominant role in making creative products in the developing world. In countries such as Rwanda and Uganda, for example, women sustain the practice of making baskets, mats and other craftwork. In Turkey and South Asia, women have been playing a major role in making carpets and other ancient

“The art of craft” – How art can contribute to the export economy

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June 2020

stakeholders across value chains. “It is also important to have seamless cooperation among those in the primary, secondary and in the tertiary industries.” The visit by the President to Manicaland is an action follow-up to his call during last year’s ZimTrade Annual Exporters Conference held in Bulawayo in October, where he called on all stakeholders to work together in the development of Zimbabwe’s export capacity. “There is urgent need for both the public and private sectors to synergise our efforts and collectively take appropriate steps to boost our country’s exports, which is the most sustainable way to stabilise and grow our economy. During the conference in Bulawayo, President Mnangagwa made a clarion call for all provinces to work with ZimTrade in developing their export business plans for the provinces based on areas of comparative advantage. The long-term plan is to make sure that contribution to exports is cascaded to the district level and making sure that some of the functional irrigation scheme have a 20 percent export component.

crafts for millennia. In most countries, the creative industries have become an increasingly important contributor to GDP growth. Data shows that over the past 15 years, the creative economy is not only one of the most rapidly growing sectors of the world economy, but also transformative in generating income, jobs and exports. According to UNESCO estimates, in 2013 CCI generated US$2.3 trillion (3 percent of world GDP) and 29.5 million jobs (1 percent of the world’s active population). An Oxford Economics study estimated that CCI account for over 10 percent of GDP in Brazil and the United States. Global trade in creative goods and services is also increasing rapidly. Globalization and new technologies have accelerated cultural interactions among countries and the export of creative goods has been growing at about 12 percent per annum in the developing world in the last 15 years or so. However, these gains are not equality distributed across the globe. Asia and the Pacific, Europe and North America are seeing rapid and unprecedented growth in the creative economy. These regions account for 93 percent of the global CCI revenue and 85 percent of jobs. By contrast Africa, the Middle-East, Latin America and the Caribbean have not yet capitalised on their potential. For these regions, the CCI represent untapped economic potential, and a chance to contribute to the innovation economy and other sectors through supply chain effects. Going forward, this is an opportunity for policies that accelerate and sustain a dynamic creative economy that contributes to human development progress. Growing a dynamic creative economy depends in part on how proactive countries are in grasping opportunities and tackling challenges across many areas—

including technology, education, labour markets, macroeconomic policies, gender issues, urbanization, migration, and more.: Firstly, in line with the 2030 Agenda and the Sustainable Development Goals (SDGs), countries need to integrate the opportunities and challenges related to CCI into their national development plans, strategies and budgets. Secondly, greater effort needs to be devoted to protecting intellectual property rights. Failing to properly reward creators is holding back growth. Legal frameworks that protect the rights of creators and secure fair remuneration for them is key. Thirdly, culture often transcends borders, hence improved international, regional and international cooperation is important. Fourthly, nurturing talent is vital for CCI. The cross-fertilization of ideas, leveraging new technologies and learning from mistakes are important for any economic sector, but these play a fundamental role in the cultural and creative sectors. Governments and higher education institutions have an important role in attracting, developing and retaining talent. Fifthly, a sound understanding of the challenges and opportunities is vital for planning and policy making. Collecting and analysing

CCI data should be a priority to support better policies.

ZimTrade is also aware of the challenges that this sector faces and as such has dedicated staff to working with the arts and crafts sector in a bid to unlock its potent value and help channel its revenues into the national export fiscus. The trade body recently engaged in an initiative with German art and crafts buyer who visited Zimbabwe in February 2020. His visit was to engage local artists on the huge market for big sculptures in Europe which exists and could help form long term business relationships with local sculptures in a bid to increase the significance of the arts and crafts sector in contributing to the growth of the country’s exports. In line with empowering women in marginalised and disadvantaged communities, ZimTrade will be rolling our an arts and crafts promotion campaign where the women who are involved in basketry, weaving will have their stories told via 5 minute videos to profile them online and seek diaspora markets for their art and crafts.

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Market Focus: Unexploited opportunities in the Mozambique marketMozambique a market well known for quality of fresh seafood is the world’s 36th largest country located in the southeast coast of Africa and is endowed with rich, extensive natural resources and its economy is mainly based on agriculture. Mozambique’s industry is growing, mainly food and beverages, chemical manufacturing and petroleum production and the discovery of gas fields off the coast is set to transform Mozambique’s standards of living by providing direct employment to approximately 60 000 people at the same time enhancing its resilience and competitiveness.Despite recent economic growth, a greater percentage of the country’s population is still surviving below the poverty datum line. Mozambique is open to foreign trade which represents more than 90% of the country’s GDP and leveraging on the political relationship between the Zimbabwe and

Mozambique, ZimTrade has identified Mozambique as one of the markets with potential for Zimbabwean products and services. Mozambique is ranked amongst Zimbabwe’s top export markets after South Africa and United Arab Emirates. Both Zimbabwe and Mozambique are signatories to the Southern Africa Development Community (SADC) Trade Protocol which stimulates and encourages trade by giving one another preferential treatment in the reduction or elimination of customs duties. Duty and import related taxes could constitute a large percentage of the final price for an importer and a reduction or elimination can give the importer or exporter a substantial advantage in terms of cost over competitors from countries that do not have similar agreements.In 2018, Zimbabwe’s exports to Mozambique amounted to US$392 million against imports of US$125 million and Zimbabwe’s

major exports to Mozambique were tobacco, fresh produce, mining supplies, packaging material, wood products and seeds among others. Zimbabwe’s imports from Mozambique were mainly composed of petroleum oils and electrical energy. The economy faced an economic slowdown in 2019 due to the negative impact of cyclone Idai and Kenneth that hit the central region and Cabo Delgado respectively, causing supply shocks, destruction of infrastructure and loss of lives for hundreds of people. Following the desk research, the survey focused on finding opportunities in the Agricultural inputs and implements, FMCG, building and construction as well as the engineering sectors, ZimTrade conducted a market survey which was confined to the Maputo province. Several projects will be conducted in Mozambique and will provide both direct and indirect business

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opportunities with the most significant opportunities for Zimbabwean companies being in the building and construction and agricultural inputs and implements sectors. The reconstruction of housing is yet to commence in Mozambique after the cyclones Idai and Kenneth that occurred in March and April 2019 respectively. This presents opportunities for Zimbabwean companies to participate in joint tenders for building and construction as activities mainly in the Manica and Sofala provinces are anticipated to kick off in the next three months. Potential also exists in the provision of materials for the construction activities that will take place in the provinces which have been mostly affected by the cyclones as well as services in the engineering sector. Mozambique procures most of its material from South Africa mainly because of proximity, but Zimbabwean companies have also the potential to supply products like wooden door and window frames, roofing tiles, PVC pipes, gum poles and timber among others. Though the country’s economy is based on agriculture, there is low productivity resulting from lack of appropriate technologies with farmers dependent on traditional farming methods, low-yield seed varieties and manual cultivation techniques. Findings from the market survey

indicate that this lack of skills and expertise as well as quality seeds comes as an opportunity for Zimbabwean technical services in the agricultural inputs and implements sector. Zimbabwean companies have the potential to supply products like seeds, chemicals, treated poles for fencing, tractor drawn implement, hand tools, chemicals and fertilisers among others. Mozambique’s largest trading partners are South Africa and Portugal. Other countries like Brazil, China, India and Japan have established projects in the country and are increasing their investments. To increase awareness of Zimbabwean products in the Mozambique market, ZimTrade will be organising outward seller missions to Mozambique as well setting up products display at the Zimbabwe Embassy in Mozambique. On the other hand, ZimTrade will also invite buyers from Mozambique in the sectors covered during the market survey to conduct B2B meetings with Zimbabwean companies as well as factory visits to enable them to get an appreciation of operations and the quality of products being made in Zimbabwe. ZimTrade will also be conducting a dissemination seminar where findings of the market survey will be shared in depth and Zimbabwean companies are urged to take advantage of the opportunities to be shared.

It is also vital for the Zimbabwe Mission in Mozambique to play a role in supporting Zimbabwean companies wanting to export to Mozambique through scanning and providing information on trade leads, tenders and other special trade initiatives. There are generally good relations between Zimbabwe and Mozambique and Zimbabwean companies should take advantage of these relations in penetrating the market. Packaging and labelling have become increasingly of concern for all products in the Mozambique market and according to the National Institute for Standardisation and Quality, all products to be sold in the country should be labelled in Portuguese. For Zimbabwean companies to make a breakthrough into the Mozambique market, a medium to long term strategy coupled with local partnerships is recommended and this includes the establishment of warehouses which are a core part of the infrastructure necessary to facilitate the functioning of the products supply chain. It is also important for Zimbabwean companies to be innovative and work on product quality and quantity improvement as well as market penetration strategies, which can result in tapping the Mozambique market at the same time exploiting the new opportunities that the country offers. As globalisation and international trade grows, so does competition for markets and overseas companies are posing a threat to the existence of most Zimbabwean companies as they struggle to withstand the competition and secure market share. Local companies need to develop new business models and work together in consortiums, both SMEs and large companies to gain entry into the Mozambique market that is reflecting great potential.

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