News / National
Zimbabwe companies map alternative routes as SA burns
23 Jul 2021 at 09:18hrs | Views
ZIMBABWE'S industry has begun mapping out longer and expensive trade routes to export their products overseas after vital transport corridors via South African ports were hit by two weeks of violence, a Confederation of Zimbabwe Industries (CZI) report said yesterday.
CZI warned that South African markets might also collapse, shutting out Zimbabwe and businesses which channel most of their exports through that country.
If the situation reaches breaking point, the implications would be dire for Zimbabwe, which had recently made significant inroads in reducing its trade deficit with South Africa, said CZI.
CZI said shifting routes would be important but the challenge was that Harare's goods would become uncompetitive on the international market.
"With malls being ransacked and other companies being forced to shut down, demand for our exports will be negatively affected," the CZI lamented.
"It is also a route for our exports, destined for other countries. With trucks being looted and torched, it will be risky to transport cargo through South Africa. Exporters will be forced to choose slower routes or more expensive routes to transport their exports to other countries. Expensive routes will make our exports uncompetitive in a competitive world market. Slower routes will make our exports undesirable as customers will have to wait for longer periods. Durban corridor incapacitation affects movement of exports. The risk is high but this will affect our customers who purchase merchandise on free on board (FOB) basis," CZI said.
"(Companies will be affected by) inability to dispatch and collapse of markets (loss of markets), disruption of distributors in SA which may delay repeat orders, businesses of some export customers may fail to recover, which will result in loss of business, raw material shortages may also result in finished product shortages which effectively limit export volumes for local manufacturer."
South Africa slipped into a crisis two weeks ago after that country's Constitutional Court caged charismatic ex-president Jacob Zuma for 15 months for contempt of court, with enraged citizens destroying businesses and closing trunk roads linking major ports with the rest of Africa.
Zimbabwe was one of the most immediate casualties of the upheavals as South Africa absorbs about 39% of Harare's exports.
CZI warned that South African markets might also collapse, shutting out Zimbabwe and businesses which channel most of their exports through that country.
If the situation reaches breaking point, the implications would be dire for Zimbabwe, which had recently made significant inroads in reducing its trade deficit with South Africa, said CZI.
CZI said shifting routes would be important but the challenge was that Harare's goods would become uncompetitive on the international market.
"With malls being ransacked and other companies being forced to shut down, demand for our exports will be negatively affected," the CZI lamented.
"It is also a route for our exports, destined for other countries. With trucks being looted and torched, it will be risky to transport cargo through South Africa. Exporters will be forced to choose slower routes or more expensive routes to transport their exports to other countries. Expensive routes will make our exports uncompetitive in a competitive world market. Slower routes will make our exports undesirable as customers will have to wait for longer periods. Durban corridor incapacitation affects movement of exports. The risk is high but this will affect our customers who purchase merchandise on free on board (FOB) basis," CZI said.
"(Companies will be affected by) inability to dispatch and collapse of markets (loss of markets), disruption of distributors in SA which may delay repeat orders, businesses of some export customers may fail to recover, which will result in loss of business, raw material shortages may also result in finished product shortages which effectively limit export volumes for local manufacturer."
South Africa slipped into a crisis two weeks ago after that country's Constitutional Court caged charismatic ex-president Jacob Zuma for 15 months for contempt of court, with enraged citizens destroying businesses and closing trunk roads linking major ports with the rest of Africa.
Zimbabwe was one of the most immediate casualties of the upheavals as South Africa absorbs about 39% of Harare's exports.
Source - newsday
