‘Local producers should integrate into regional value chains’
Local industries should quickly integrate into regional value chains by shifting focus from exporting primary products and investing more in value-addition to widen their export market and increase foreign currency earnings, ZimTrade chief executive officer, Mr Allan Majuru, has said.
While Zimbabwe’s economy is largely anchored on mining and agriculture production as key export drivers, the inclination is still skewed towards raw commodities with minimal or no value addition.
The mining industry, for instance, is one of Zimbabwe’s economic mainstays with the sector presently contributing about 70 percent of the country’s foreign currency earnings.
The Second Republic has come up with a US$12 billion mining industry roadmap by 2023 with the gold sector expected to generate US$4 billion, platinum US$3 billion and chrome, iron, steel, diamond and coal contributing US$1 billion.
Lithium is expected to contribute US$500 million while other minerals will contribute US$1,5 billion.
In an article titled “Made in Africa: Local firms must tap into regional value chains,” Mr Majuru said there is need for increased participation in regional value chain focusing on value addition and beneficiation.
He said some of the targeted value chains that have high employment and export-generating potential include processed foods, leather, fertiliser, pharmaceuticals, dairy, and packaging.
“Thus, when partaking in regional value chains, Zimbabwean companies must find a niche and capitalise on the country’s infrastructure, geographical location, favourable climatic conditions, and available human capital,” he said.
Mr Majuru said to achieve full economic integration, individual member states must find a position where they contribute towards the production process of products and services that originate from the region.
“For local companies, real benefits will accrue when they integrate in regional value chains and take up activities that focus on high value addition processes,” he said.
“Apart from benefits for local companies, Zimbabwe’s economy stands to amass huge spin-offs if local companies increase their participation in regional value chains, focusing on beneficiation and value addition,” said Mr Majuru.
“In fact, value-addition, which is the primary focus of regional value-chains is currently at the centre of the Second Republic’s development agenda, with President Mnangagwa clear on the direction that local businesses should take.”
Speaking at the Zimbabwe-Rwanda Trade and Investment Conference recently, President Mnangagwa challenged businesses to discuss viable options that will increase value addition and export diversification.
“I call upon our industrialists to enhance value addition and diversify our export mix through competitive and efficient value chains,” he said.
“In doing so, Africa will put to an end the perennial and unfortunate challenge of exporting primarily raw commodities from its sectors of the economy.”
As such, Mr Majuru said programmes such as Eagles’ Nest Youth Export Incubation and Next She Exporter currently being implemented by ZimTrade are designed to enhance value-addition from youth-led and women-led companies.
“The development of national export clusters across all provinces is also intended to integrate small businesses and rural communities into regional value chains by developing their capacities as well as link them with partners, buyers, and suppliers in the region and beyond,” he said.
“Further to this, through the Zimbabwe National Industrial Development Policy (2019-2023), the country adopts a value chain approach, with the target of improving participation in regional and global supply chains.”
Mr Majuru said the policy calls for development and implementation of sector-specific value chain strategies to create competitive economic linkages and business opportunities for entrepreneurs.
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