SA, Zim’s largest trading partner
Bulawayo- South Africa remained Zimbabwe’s largest trading partner in the first month of 2015 with the two countries trading mainly minerals, agricultural products and some basic commodities.
Figures released by Zimbabwe National Statistics Agency (ZIMSTAT), show that exports by Harare to its southern neighbour amounted to $198.3million with Zimbabwe for the first time registering a surplus of $18.9 million while imports from South Africa amounted to $196.4million.
Mozambique remains in second place with exports of $41 million. United Arab Emirates and Zambia come in at third and fourth place respectively.
Economist Respect Gwenzi said South Africa was Harare’s largest trading partner because the country is highly industrialised.
“The high concentration of our imports coming from a single economy is best explained in terms of industrialisation.
The neighbouring economy of South Africa has moved ahead of peers in the region and Africa at large in mechanising its industry with modern technology that enhances production processes and minimises inefficiencies,” Gwenzi said.
“This naturally lowers the cost of production.
The output is therefore comparably cheaper and can sell comparatively against peers.”
Recent figures, Gwenzi said, also shows that South Africa accounted for the largest chunk of the Foreign Direct Investment (FDI).
Naturally, the Sub Saharan economies are referred as high risk and therefore international bonds targeted at Africa attract higher interests and in turn affects profitability margins.
“South Africa is often exempted from these high capital costs as the economy is referred to as fundamentally strong,” he said.
The mining sector continues to dominate on export receipts with minerals such as nickel raking in $48.2million, gold $43 million, ferrochrome $15.2million, and industrial diamonds $14.8 million.
Agriculture saw tobacco exports totalling $79 million and cane sugar at $17.1million.
He said other regional countries should put necessary measures for them to be competitive as well.
“For other countries in the region, it basically is an issue of moving fast to industrialise their nations with modern production means as well increasing the attractiveness of their economies to secure cheaper finances,” Gwenzi said.
Despite the surge in exports to South Africa, the overall trade deficit for January was still pegged at $271.1 million as Harare exported goods and services worth $268 million against total imports of $538.2 million.
According to Zimbabwe’s Industry and Commerce Minister Mike Bimha, intra-regional trade is still very low resulting in the importation of goods from other regions.
Regional experts have completed a provisional report outlining the industrialisation policy expected to prioritise value addition and beneficiation in SADC.
The interim report has since been forwarded to the SADC Ministerial Taskforce on Regional Economic Integration meeting in Harare from February 23 to March 8 to reflect on progress and give guidance to expedite the development of the regional industrial strategy.
This is in preparation for the Extra-ordinary SADC Summit on industrialisation to be held in April in Harare to discuss the matter.
In August last year, the SADC Summit mandated the Ministerial Taskforce on Regional Economic Integration to come up with a strategy and roadmap for industrialisation.