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Covid-19 creates lucrative window for Zimbabwe exports

by Staff reporter
05 May 2020 at 07:37hrs | Views
THE national export promotion agency, ZimTrade, says the global lockdown due to Covid-19 has created supply gaps in the region, which presents huge opportunities for local companies to seize.

The trade agency said it was engaging local companies and regional buyers with a view to ensure local business survives the coronavirus onslaught, which has led to closure of business and job losses.

According to ZimTrade, Botswana, Zambia and Namibia are some of the regional destinations with a ready market for Zimbabwean products.

"The coronavirus-induced global lockdown is negatively affecting Zimbabwe's exporters in the short- to medium-term as it is beginning to take a toll on business. "For those that are in manufacturing, some have reduced output due to downtime while others are facing disruptions in sourcing of raw materials, especially those that are imported.

"With regard to exporters, those who are not supplying essential goods and services are not able to transport their products as they did a few months ago due to travel and other border restrictions. "This has affected their ability to supply products to export markets as well as to meet with buyers," said the agency.

It said the future of local exporters and businesses and their relevance on the global market post Covid-19 will be determined by whatever steps they take during the lockdown period.

"What is needed is to refocus priorities and concentrate on areas that will make it easy to meet demand, which is projected to grow once borders begin to re-open.

"Without access to markets, local businesses will struggle to remain in business due to a loss in sales and profits but with overhead expenses remaining to be paid. Regional markets can, therefore, provide a cushion for local companies as they are easier to access compared to international markets.

"This is because most countries in the region have remained open to trade, although emphasis has been on essential strategic products. "To stay afloat during these difficult times, local companies must have a strong understanding of the regional markets, especially on current measures adopted to stop the spread of coronavirus (Covid-19) as most of these affect trade," said ZimTrade.

The agency explained that an understanding of these measures means local companies are better equipped to know where to place their products and adjust their export strategy to ensure that they grab the available opportunities in the market. ZimTrade said through continued engagements with buyers plus improved production, local companies can increase their chances of trading regionally. Covid-19 has destabilised markets, which are increasingly becoming inconsistent, with fears that some might fail to make it after the global pandemic.

As such, the trade promotion agency has advised local companies and exporters to closely monitor trends on the global export market. Constant monitoring of markets will allow local manufacturers to place their dollar where they can get the best value, stated ZimTrade.

"Although international markets will be difficult to supply, countries in Africa will remain a promising market for Zimbabwean products. This is because most countries in the region still allow for cargo to pass and with simplified logistical arrangements, local exporters can easily supply these markets," said ZimTrade.

This means local exporters can also leverage on regional and continental trade agreements such as the African Continental Free Trade Area (AfCFTA), Common Market for Eastern and Southern Africa (Comesa) and Sadc. Zimbabwe and Namibia enjoy good relations, which local businesses can take advantage of to increase exports to that country.

The two countries are signatories to the Sadc Trade Protocol and the bilateral Zimbabwe-Namibia Preferential Trade Agreement, which offer preferential treatment on qualifying products. Similarly, Botswana is an open market while Zambia's taste of goods and services resembles that of Zimbabwe.

This calls for local companies to tailormake their products to meet needs of the African market. Government on the other hand is expected to offer non-monetary incentives for local exporters who should focus on retooling as part of their Industry 4.0 transformation initiatives as this will cushion them from the impact of Covid-19 and any possible future pandemics.

ZimTrade also said it is in constant touch with buyers and is ready to assist companies that may need to contact buyers in regional and international markets.

The trade organisation is already working on an online platform to assist buyers and sellers to meet to source products from Zimbabwe and has urged local companies to build and strengthen their online presence as potential buyers are turning more and more to the internet to look for potential suppliers.

"The online platforms should be fully equipped with product information, responsive contact details, accessible call to action tabs and payment options," it said.

"By establishing an online presence, local companies increase chances and reduce the cost of connecting with customers from across the world, thus improving on brand visibility," said ZimTrade.

Source - chronicle