Business / Local
Zimbabwe must rely less on South Africa - Study
19 Jun 2013 at 15:39hrs | Views
Harare - Zimbabwe needs to explore new global markets with the view of diversifying from heavy reliance on South Africa, a new Trade and Transport Facilitation Assessment study on Zimbabwe has shown.
According to the study, the country needs to explore new markets as its reliance on trading with South Africa makes it vulnerable to market developments in that country.
According to the TTFA report done with funding from the World Bank, Zimbabwe imported goods worth $2.3bn from South Africa in 2008, which is about 75% of its imported goods that year.
The report also recommends Zimbabwe to import from countries from the EU which could provide cheaper sources of raw materials under the Economic Partnership Agreement (EPA).
"A major implication of having South Africa as Zimbabwe's single most significant trading partner is that the transport and trade infrastructure between the two countries should be further developed," said the report, adding that improving transport infrastructure should be one of the key government priorities.
The report also said the single border post between the two countries is already a major trade constraint because it is constantly congested.
"Development options include expanding the current border post to accommodate more traffic or constructing a new border post altogether," suggested the report.
The report also cited delays at the border as a major source of high transport costs.
"Some studies attribute 70% of the transport costs in Zimbabwe to the delays," said the report, adding that delays usually lead to huge losses for traders as some goods, particularly perishables, go bad during the long wait.
"The delays also lead to corruption as exporters offer bribes to customs officials in return for speedy clearance."
Meanwhile the latest World Bank Global Trading Across Border list puts Zimbabwe at 172 out of 183 countries. Mozambique is the best performing SADC member state on that list at 132, followed by South Africa at 144, Botswana at 150, Zambia 153 and Malawi 164.
Zimbabwe has also featured poorly on the Logistics Performance Index (LPI) of the World Bank, scoring 2.25 out of a possible score of 5 based on six key trade dimensions, which include efficiency of the clearing process by border control agencies and customs, quality of trade and transport related infrastructure, ease of arranging competitively priced shipments, competence and quality of logistics services and ability to track and trace consignments.
According to the study, the country needs to explore new markets as its reliance on trading with South Africa makes it vulnerable to market developments in that country.
According to the TTFA report done with funding from the World Bank, Zimbabwe imported goods worth $2.3bn from South Africa in 2008, which is about 75% of its imported goods that year.
The report also recommends Zimbabwe to import from countries from the EU which could provide cheaper sources of raw materials under the Economic Partnership Agreement (EPA).
"A major implication of having South Africa as Zimbabwe's single most significant trading partner is that the transport and trade infrastructure between the two countries should be further developed," said the report, adding that improving transport infrastructure should be one of the key government priorities.
The report also said the single border post between the two countries is already a major trade constraint because it is constantly congested.
The report also cited delays at the border as a major source of high transport costs.
"Some studies attribute 70% of the transport costs in Zimbabwe to the delays," said the report, adding that delays usually lead to huge losses for traders as some goods, particularly perishables, go bad during the long wait.
"The delays also lead to corruption as exporters offer bribes to customs officials in return for speedy clearance."
Meanwhile the latest World Bank Global Trading Across Border list puts Zimbabwe at 172 out of 183 countries. Mozambique is the best performing SADC member state on that list at 132, followed by South Africa at 144, Botswana at 150, Zambia 153 and Malawi 164.
Zimbabwe has also featured poorly on the Logistics Performance Index (LPI) of the World Bank, scoring 2.25 out of a possible score of 5 based on six key trade dimensions, which include efficiency of the clearing process by border control agencies and customs, quality of trade and transport related infrastructure, ease of arranging competitively priced shipments, competence and quality of logistics services and ability to track and trace consignments.
Source - Fin24
