New incentives to boost exports

Source: New incentives to boost exports | Sunday Mail (Business)

Business Reporter

Export incentives announced by Government last week could not have come at a better time for exporters that are accompanying ZimTrade on outward seller missions to Dubai and the DRC.

ZimTrade is currently implementing its 2020 to 2023 strategy to increase participation in export promotion activities.

In essence, the strategy entails participating in various export promotion activities, including outward seller missions, to identify potential customers and buyers for local products in those new markets.

The export promotion body will, therefore, be on a charm offensive in the Democratic Republic of Congo (DRC) and Dubai this week.

In DRC, ZimTrade will be facilitating an outward mission for 24 local companies in Lubumbashi from the May 18 to May 20.

The participating companies are from various sectors, including those involved in the manufacture and supply of FMCG (fast-moving consumer goods), horticulture, workwear, building and construction materials, industrial, mining machinery and equipment, among others.

It is believed that the DRC market is increasingly becoming a business destination for organisations looking to increase brand awareness, generate new leads, form new partnerships, and showcase products, services and technologies.

The country is also predominantly rich in mineral resources and relies on imports of goods and services for its huge population.

“This presents a good opportunity for Zimbabwean exporters of mining consumables, engineering and safety solutions to do business with both small- and large-scale miners,” ZimTrade said.

Running almost parallel to the DRC outward seller mission is another mission in Dubai, where local businesses, mostly fresh produce companies, are expected to take part in business-to-business engagements.

The Dubai event will start with a business conference scheduled for May 17 followed by a series of B2B (business-to-business) meetings that will end on May 19.

Dubai is seen as a strategic market that will offer access to the entire United Arab Emirates, especially for horticultural produce.

It is becoming a major supplier of horticulture to other countries through re-exports. 

Re-exports of the UAE food industry are now over 50 percent of food imports.

The country is regarded as one of most food-secure countries in the world.

According to ZimTrade, the objective of the outward mission to Dubai is to establish supply linkages between Zimbabwean producers and Dubai sellers.

A pre-mission held in January revealed buyers are interested in procuring avocadoes, blueberries, citrus, peas, sweet potatoes, coffee and tea.

Local producers that are attending the mission include producers of horticulture produce like nuts (macadamia and peacuns), dates, pineapples, avocados, guavas, mangoes, citrus fruit, fresh or dried tea, whether flavoured or not, et cetera.

Local companies who will be part of the mission were selected according to their ability, readiness and commitment to export locally manufactured quality products. 

Fresh produce exports to the United Arab Emirates, which Dubai is part of, amounted to US$4,6 million in 2019.

Citrus, peaches, blueberries, and fresh flowers made the bulk of the exports.

According to Trade Map, the fresh produce import market in UAE is valued at over US$4 billion, and of this amount, US$2,3 billion is re-exported to Iran, Saudi Arabia, Yemen, Oman and Iraq.

New export incentives

Following wide consultations with exporters and other stakeholders, Government announced plans to put in place “incentives to motivate exporters and investors in order to stimulate incremental exports”.

According to the implementation framework for the incremental export incentive scheme released by Finance and Economic Development Minister Professor Mthuli Ncube, all exporters will now keep 80 percent of their incremental export proceeds, up from 60 percent.

It means for all the additional exports from the current averages, exporters will retain 80 percent of the proceeds while the balance will be sold to the Reserve Bank of Zimbabwe.

If exporters operate from Special Economic Zones or are listed on the Victoria Falls Stock Exchange, they are entitled to keep 100 percent of their incremental export proceeds. 

Further, exporters will enjoy duty-free imports of raw materials that are designated for the manufacture of goods for export. Exporters will also now enjoy a deduction of an amount of any export-market development expenditure incurred.

Government says the objective for the incentives “is to boost productivity by firms currently engaged in exporting business, as well as encourage entities that are not exporting so that they may venture into the exporting business”.