Zimbabwe is targeting to increase its annual exports to $5 billion by 2021 and to reduce formal unemployment by 50 percent, according to a medium term strategy blueprint seen by Business Weekly.
Known as the National Export Strategy, the blueprint focuses on growing exports in food and beverages, pharmaceuticals, iron and steel, fertilizer, textile and clothing, horticulture, leather, furniture, arts and crafts sectors.
While Zimbabwe has over the years been crafting policies targeted at promoting exports from the products sector, the new strategy also seeks to boost exports under service industries such as tourism, human skills development and diaspora remittances.
“The major aim of the National Export Strategy is to make Zimbabwe globally competitive with a view to expanding current levels of exports by placing emphasis on value added exports, diaspora remittances and services,” read part of the document.
“To achieve this, the NES has developed competitiveness strategies that will place Zimbabwe in the global economic arena as an equal trade partner and beneficiary. The implementation of this strategy is expected to result in increased export growth, leading to employment creation for poverty reduction in line with the Zim-Asset.”
The NES targets 10 percent annual growth in exports from a base of $2,8 billion in 2016.
Exports of manufactured goods are targeted to grow by 12 percent per year from about $424 million in 2016. Contribution to export revenue would double to 25 percent.
The services sector is projected to contribute at least 15 percent of total export revenues by 2021 while remittances would increase from $935 million in 2015 to $2,2 billion by 2021, representing an annual growth rate of 13 percent. The targets would be reviewed periodically in view of the prevailing economic conditions and available fiscal support.
Key strategy pillars
The strategy would be premised on four main pillars — improving export enabling environment and global competitiveness, increasing demand through market prioritisation, diversification and access, developing exporters, increasing export capacity and strengthening exporter performance and strengthening the export promotion mechanisms.
It will largely focus on achieving economic development as opposed to economic growth.
This will involve mainstreaming the Small to Medium Enterprises, which would see the creation of 100 000 jobs from the priority sectors’ expansion and new businesses.
The “new” environment that would arise from the strategy may lead to the creation of additional 50 000 jobs, and potentially reduce formal unemployment by over 50 percent.
The strategy will also focus on development of rural infrastructure for effective implementation.
“Improving accessibility to rural areas, agricultural fields, grazing fields, providing electricity to these areas, enabling sinking of boreholes for cattle and irrigation and development of clusters would go a long way in making rural areas attractive for export production activities.
“This will reduce rural-urban migration and create employment for women, youth, college and school graduates as well as school drop outs who reside in these areas,” read the document.
Challenges currently impeding the expansion of the export sector relate to weak competitiveness.
The challenging macroeconomic environment obtaining in Zimbabwe has resulted in a situation of widespread production aversion, where producers tend to shy away from investment in production capacities because of the perceived uncertainties.
Regional and multilateral trading arrangements
Economic analysts say the document was a “missing link” in enhancing Zimbabwe’s participation in bilateral, regional and international trade and commodity arrangements.
Zimbabwe has over 40 BTAs encompassing both Preferential Trade Agreements and Most Favoured Nation across the globe. The country is also committed to regional integration within Comesa and Sadc and actively participates in their respective FTAs.
“Through these agreements, Zimbabwe has access to much bigger markets and a strategy that outlines measures on how to penetrate these markets is needed,” said one economist.