Foreign currency shortage is affecting the producers of the trade commodity, exporters who are struggling to meet targets.
ZimTrade, giving a 2018 Trade Outlook revealed that companies are failing to meet targets as foreign currency to acquire raw materials continue facing scarcity.
“ZimTrade’s engagements with exporters have revealed that companies focused on value-addition are struggling to meet their targets against a backdrop of foreign currency shortages for retooling and acquisition of critical raw materials,” ZimTrade says in the latest update.
Zimbabwe has witnessed companies suspending operations due to foreign currency challenges with RioZim closing down three gold mines after failing to acquire raw materials.
ZimTrade’s Key Highlights of 2018 Trade Statistics also revealed a 23% less manufactured tobacco products were exported as compared to 2017 after processers were unable to import necessary chemicals, papers, and filters required for value addition.
“This meant that Zimbabwe missed out on some of its share of the US$25 billion cigarette industry,” ZimTrade says.
Export of finished leather and leather products also declined by 13% in 2018.
“This too is another case of increased exports but reduced value addition,” ZimTrade explained on processed leather.
Despite foreign currency challenges, Zimbabwe recorded an increase in exports of building and construction materials to US$50 million in 2018 from US$45 million the previous year.
The country also recorded a rise in clothing and textile exports to US$28 million in 2018 from US21 million.
“Horticulture was the big winner in 2018, more than doubling from US$52 million in 2017 to US$112 million,” Zimtrade says.
“This was driven in part by some new entrants into horticulture exports (cauliflowers, shelled macadamia, other mushroom varieties, kidney and bambara beans, kale etc) as well as the harvesting of macadamia and citrus orchards planted some years back.”
Zimbabwe recorded US$4.1 billion in 2018 total exports a 17% increase from US$3.5 billion in 2017 and the highest since 2010.
“Some very key sectors and companies are struggling to produce given the high cost of doing business,” ZimTrade CEO Allan Majuru said. “As the national trade body, we continue to lobby for an environment which can ensure sustained production, competitiveness and growth in value-added exports which will subsequently reduce the trade deficit and also create employment.”