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10% annual export growth target set

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ZIMBABWE has set an ambitious target to increase manufactured exports by 10% per annum over the next six years as the sector gears for intense competition from the region.

BERNARD MPOFU

While the coming into force of the African Continental Free Trade (AfCFTA) has opened additional avenues for expanding export markets, critics say limited investment to replace obsolete machinery and antiquated equipment have made the southern African nation less competitive in the region. Zimbabwe became a member of AfCFTA in 2018 and ratified the agreement in 2019.

This week, the government launched an economic blueprint for the manufacturing sector which seeks to increase output and grow exports.

The Zimbabwe National Industrial Development Policy (2024 – 2030) is, according to the Industry and Commerce ministry, aligned to United Nations Sustainable Development Goals and the African Union Agenda 2063.

“Its objectives are to increase manufacturing sector growth by 2% per annum, produce quality goods and services, increase investments in the manufacturing sector, and grow manufactured exports by 10% per annum,” the blueprint seen by The NewsHawks has shown.

“In this regard, the manufacturing sector will position itself to take advantage of the opportunities being unlocked within the Free Trade Area. This must be matched by production and productive capacities of firms to deliver in-demand high quality manufactured goods.  Therefore, the country needs to attract both domestic and foreign investors ready to export into the large continental market.”

Official figures show that in the early 2000s, Zimbabwe used to introduce 600 new products in the export basket. The rate of discovery (exports of previously un-exported products), however, has been declining and in 2019 it dropped to just five.

Over the past five years, the sector exhibited positive growth, contributing about 12.44% to gross domestic product in 2022. Over the period, capacity utilisation in the manufacturing sector rose from 47% in 2020 to 56.1% in 2022.

Immediately, Zimbabwe’s quest to transition into an upper middle-income economy by 2030 was brought into sharp focus and questions were asked as to how feasible this ambitious project is without a robust export-driven development plan.

Experts say the main constraints to Zimbabwe’s export development and economic diversification include the reliance on primary production, macro-economic instability, skills availability to drive diversification, entrepreneurship development and deficiencies in key enablers such as energy.

Zimbabwe, which at Independence had one of the most diversified economies on the continent, has often been cited as a case study on the efficacy of sanctions.

During the 1965 Universal Declaration of Independence era under former late prime minister Ian Smith, Rhodesia, a British territory in southern Africa that had governed itself since 1923, now regarded itself as an independent sovereign state. It was slapped with sanctions, but emerged stronger.

Through a combination of inward-looking policies and an aggressive industrialisation drive, Rhodesia, which later became Zimbabwe at Independence in 1980, managed to build a solid manufacturing sector with forward and backward linkages and its core infrastructure continues to stand to this day.

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