Zim companies not exporting

Markets
60% of Zim’s manufacturing companies are not exporting products because quality is inferior or they worry about the bottlenecks in reaching foreign markets

SIXTY PERCENT of Zimbabwe’s manufacturing companies are not exporting their products because the quality is inferior or they worry about the bottlenecks in reaching out to foreign markets, a ZimTrade survey has revealed. MTHANDAZO NYONI OWN CORRESPONDENT

The survey whose results were unveiled last Thursday was conducted by ZimTrade in partnership with the Confederation of Zimbabwe Industries last year to find ways of resuscitating the country’s floundering exports.

Unveiling the survey results, Africa Corporate Advisors managing director Mike Nyamazana said most firms in the manufacturing sector were not exporting and of those doing so, exports constituted a very small percentage of each company’s total production.

“Of the companies surveyed, 40% are currently exporting while 60% of the firms surveyed are not exporting,” he said.

“Of those currently exporting, the results show that they are exporting a maximum of about 40% of total production.

“About 71,4% of companies that used to export five to 10 years ago have stopped exporting.

“Reasons for not exporting include hassles of the exporting process, hassles of producing for exports, quality of products has fallen, lost skilled manpower, high cost production, restrictive labour regulations, lack of export incentives and support services.”

Nyamazana said according to the survey, those already exporting indicated that there was great potential for increasing exports.

He said companies indicated that once the government comes up with export supporting policies, most firms will be able to increase their levels of exports as they had the capacity.

He also urged the government to introduce zero duty on imports of raw materials to registered manufactures, but to increase duty on imported products which can be produced locally. He said this would compensate for the revenue lost on zero rating of raw materials.

The survey also revealed that 52% of the surveyed companies were facing competition from foreign firms, with South Africa (34%) and China (33%) being the major threats.