Business / Economy
Massive trade imbalance between Zimbabwe and South Africa
21 Apr 2011 at 04:45hrs | Views
Speaking at an Industrial Development Policy breakfast meeting in Harare yesterday, the confederation of Zimbabwe Industries president Mr Joseph Kanyekanye likened the trade relationship between Zimbabwe and South Africa to that of a "horse and rider".
Official statistics show that South Africa is dominating in terms of imports, while exports to that country have declined in recent years.
The CZI president said there was need for Government to recognise that the trade between these two countries is very biased and this was having an adverse effect on the country's industrial development.
"We should recognise that the trade between South Africa and Zimbabwe is now very biased in favour of South Africa at the expense of Zimbabwean industries.
We will continue to engage the relevant authorities to ensure that this issue is addressed for local industries to remain viable," he said.
Presently, the majority of local manufacturers have resorted to importing raw materials from South Africa due to the decline in domestic raw materials supplies. Additionally, Zimbabwe currently imports household and basic goods from South Africa as the local industry is still struggling to meet demand.
Figures from the Zimbabwe National Statistical Agency from last year show that during the period there has been a marked decline in Zimbabwe exports to South Africa, while there have been an increase in imports from that country to Zimbabwe.
Currently, the majority of Zimbabwean supermarket shelves are constituted by around 70 percent imported products and 30 percent locally manufactured products.
Manufacturing utilisation levels are currently constrained at around 40 percent, a situation that has been compounded since dollarisation by minimal liquidity in the economy, utilisation of antiquated machinery and poor utility services.
Zimbabwe's trade status could soon be reviewed in view of the imminent promulgation of the Industrial Development Policy (2011-2015).
The Ministry of Industry and Commerce has indicated that the key strategic component of the new IDP is the trade policy which will be advanced by a separate policy document to support the country's trading environment to maximise attractiveness of Zimbabwean products in the region and internationally.
Accordingly, the trade policy will nurture private sector competitiveness and support the productive sectors of the economy.
In terms of the draft Industrial Development Policy, the country is aiming to achieve an 80:20 percent ratio for goods sold in the country, which will emerge from a reduction in imported finished goods and a simultaneous ramp-up in the local manufacturing sector's productive capacities.
Official statistics show that South Africa is dominating in terms of imports, while exports to that country have declined in recent years.
The CZI president said there was need for Government to recognise that the trade between these two countries is very biased and this was having an adverse effect on the country's industrial development.
"We should recognise that the trade between South Africa and Zimbabwe is now very biased in favour of South Africa at the expense of Zimbabwean industries.
We will continue to engage the relevant authorities to ensure that this issue is addressed for local industries to remain viable," he said.
Presently, the majority of local manufacturers have resorted to importing raw materials from South Africa due to the decline in domestic raw materials supplies. Additionally, Zimbabwe currently imports household and basic goods from South Africa as the local industry is still struggling to meet demand.
Figures from the Zimbabwe National Statistical Agency from last year show that during the period there has been a marked decline in Zimbabwe exports to South Africa, while there have been an increase in imports from that country to Zimbabwe.
Currently, the majority of Zimbabwean supermarket shelves are constituted by around 70 percent imported products and 30 percent locally manufactured products.
Manufacturing utilisation levels are currently constrained at around 40 percent, a situation that has been compounded since dollarisation by minimal liquidity in the economy, utilisation of antiquated machinery and poor utility services.
Zimbabwe's trade status could soon be reviewed in view of the imminent promulgation of the Industrial Development Policy (2011-2015).
The Ministry of Industry and Commerce has indicated that the key strategic component of the new IDP is the trade policy which will be advanced by a separate policy document to support the country's trading environment to maximise attractiveness of Zimbabwean products in the region and internationally.
Accordingly, the trade policy will nurture private sector competitiveness and support the productive sectors of the economy.
In terms of the draft Industrial Development Policy, the country is aiming to achieve an 80:20 percent ratio for goods sold in the country, which will emerge from a reduction in imported finished goods and a simultaneous ramp-up in the local manufacturing sector's productive capacities.
Source - Byo24News
