Exporting companies buckle under pressure

via Exporting companies buckle under pressure – DailyNews Live by Kudzai Chawafambira  6 APRIL 2014

More than half of Zimbabwe’s exporting companies are facing stiff competition from Chinese and South African firms.

According to the latest local export manufacturing capacity survey by Zimtrade, 52 percent of local exporting firms are buckling under pressure from foreign companies, which receive various incentives and support from their governments to reduce the cost of exporting.

“The study revealed that, 34 percent of the firms have products facing stiff competition from products from South Africa, while 33 percent indicated that China is the source of imports competing with their products in the local market,” said the report.

South Africa is the single leading export destination for Zimbabwean manufactured products, with 70 percent of exporters citing the neighbouring country.

This comes as the country’s local manufacturing sector needs to re-orient trade facilitation regulators in order to ease bottlenecks that hinder enhancement of export competitiveness. In recent years, Zimbabwe has run systemic trade deficits due to declining exports.

Figures recently released by the Zimbabwe National Statistics Agency (Zimstat) showed that the trade deficit for 2013 widened to $4,19 billion from $3,6 billion in 2012 after the country imported goods worth $7,70 billion against exports of $3,51 billion. “Amendment of the laws is not sufficient, in addition to the amendment of laws regulating business, there is need re-orient many of the institutions that administer the various laws to transform them into pro-business facilitation entities,” said Zimtrade

The report noted that local exporting companies are facing hurdles with the country’s laws that are no longer serving the interests of the economy, citing clashes that occur among the police, Reserve Bank and Zimra among others.

Zimtrade recommended that industry needed to carry out value chain analyses to determine which industries can and should be revived and the sequencing of the same.

“The establishment of a working capital revolving fund for industry to fund export development and promotion activities will also provide opportunities to leverage matching grant funding support from Development Cooperation partners,” said the trade body. The country’s manufacturing sector remains in a crisis, with capacity utilisation plummeting to 39 percent from 44,2 percent in the year to September 2013.

According to CZI’s 2013 manufacturing sector report, the country’s industry continues to be depressed despite improvements in the macro-economic conditions.

The decline in industry performance comes at a time when the economy — which showed signs of improvement during the four-year coalition government, growing an average of seven percent between 2009 and 2012 — is deteriorating, with this year’s targeted gross domestic product growth already revised downwards from five percent to 3,4 percent.

ZimTrade’s mandate is to inculcate an export culture among business organisations and facilitate them to develop and expand into sustainable international trade.

COMMENTS

WORDPRESS: 6
  • comment-avatar

    Zim goods are too expensive and cannot compete because of corruption. 30-40 percent of every dollar in the economy goes to service corruption. The environment of corruption fostered by Mugabe has imposed sanctions on the countrry’s exporters and it’s own citizen’s as well. Everything in zimbabwe is more expensive then it should be, because of corruption and the fact that there is no rule of law. Mugabe and ZANU have created instability, because it benefits them personally, but their actions are driving the country to absolute collapse. Even once they are gone, their actions will take decades are be rectified.

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    John Thomas 8 years ago

    Get rid of red tape and government obstruction. Mugabe first since he is the biggest problem.

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    Mixed Race 8 years ago

    I blame our government who lacked foresight on how to manage big industries particularly those in Bulawayo,when they allowed petty politics to destroy our industries in the hope that after achieving their political agendas they would turn the ON switch then the industries will come back overnight.This is mission impossible in real situations and its stupidity because its effects will haunt them for life.
    I have seen very good companies which make high quality farming wire but they are not allowed to compete fairly with substandard wire from S Africa who order Chinese wire and then repackages with false stamps claiming to be made in that country to avoid breaking SADC trade protocols.The government is not making hard efforts to assist these companies which are trying hard to compete with these big cheats in the south.I really salute these few left companies which struggle trying to survive in this unfair world of uneven trade rules and regulations.
    Our government should not waste time trying to kill the opposition instead of helping the few big companies left to survive economically otherwise your rule will be hell due to poor economy.

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    protestor 8 years ago

    Aaah we export nothin coz we produce nothing we are having the Government we so deserve

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    ZIMBABWE’S INDUSTRY IS SINKING FAST AND BY THE TIME THE NEXT ELECTIONS ARE HELD THERE WILL BE NO ECONOMY.THIS GOVERNMENT DOESNT CARE AND IS ONLY INTERESTED IN SERVING ITS OWN INTERESTS.THEY THINK A FEW PEOPLE PUSHING ARUOND FRUIT CARTS IS TRUE INDUSTRIAL GROWTH.

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    Magic Johnson 8 years ago

    well done zanu….your ‘look east policy’ is working extremely well. if only we had people like you running the british and american economies, the world would be a better place. CORRUPT THIEVING IDIOTS!!!!!!!!!!!!!