Zimtrade faces challenges

HARARE - Zimtrade’s operations are seriously under threat owing to lack of adequate financial resources, hampering its efforts to revitalise export-led economic growth.

Presenting the trade body’s maiden report for the year ended December 2011 last week, board chairperson Jethro Siziba said the high operational and administration costs weighed heavily on the organisation.
“A deficit of $67 790 was therefore recorded in 2011, which compares unfavourably to the deficit of $3 509 recorded in 2010,” said Siziba.

“As a result the information communication technology (ICT) systems have largely remained obsolete, library information outdated and the vehicle fleet is old and inadequate…..” Siziba added.

The trade body’s total income for the year 2011 amounted to $710 515 compared to $521 012 recorded in prior period.

“The trade development surcharge, which remains the major income for the organisation and is dependent on the performance of qualifying imports and exports, contributed $624 851 (88 percent) of the total income compared to $417 583 in 2010,” said Siziba.

Total expenditure for 2011 grew by 48 percent from $524 521 to $778 305 in 2011.

“Given the poor financial performance, ZimTrade had a major challenge in the delivery of its mandate,” said Siziba.

He said the negative country perception, coupled with the high cost and cumbersome procedures of doing business across borders, were real issues of concern requiring  immediate attention.

“Overall, the depressed industrial operations and the lack of competitiveness have contributed to the failure to effectively penetrate external markets and to the rise in imports thus threatening
the survival of the local producers or manufacturers,” he added. As a result of the economic challenges, the performance of the country’s exports during the period was disappointing even though exports grew by 9,6 relative to 46,7 growth in imports.

“This translates to a growing negative trade balance, which is an unsustainable situation. “It is a major concern that the country’s export basket is dominated by commodities such as minerals and raw agricultural products as opposed to value added products and services,” said Siziba adding that on the other hand imports were dominated by consumer goods as opposed to productive machinery or inputs for the productive sector.

Going forward Siziba said the outlook remained unpredictable and bleak adding that Gross Domestic Product growth prospects for the country have been revised downwards from 9,4 percent to 5,6 percent for this year.

“Export performance for the first half of this year has been sluggish with imports continuing to outperform exports. This has negatively impacted on ZimTrade’s revenue and thus its capacity to deliver on its mandate,” said Siziba.

He said although government launched the highly credible National Trade and Industrial Development policies in March this year, implementation was being threatened by lack of resources.

ZimTrade’s mandate is to inculcate an export culture among business organisations and facilitate them to develop and expand into sustainable international trade.

Post a comment

Readers are kindly requested to refrain from using abusive, vulgar, racist, tribalistic, sexist, discriminatory and hurtful language when posting their comments on the Daily News website.
Those who transgress this civilised etiquette will be barred from contributing to our online discussions.
- Editor

Your email address will not be shared.