ZIMBABWE incurred a negative trade balance of US$532 million from its trade with South Africa after importing US$3,2 billion worth of goods compared to exports to the same country of US$2,7 billion.
Trade between the two countries totalled US$5,9 billion last year from US$4,6 billion in 2011 and South Africa remains Zimbabwe's biggest trading partner accounting for more than 60 percent imports.
It is against this backdrop that a Zimbabwe delegation is in South Africa for an investment conference the former aims to use to attract Foreign Direct Investment, which has eluded it over the last decade.
Secretary for Economic Planning Dr Desire Sibanda said in a statement before leaving for the investment conference that economic growth has averaged 7,1 percent in the last three years.
Dr Sibanda, however, pointed out that the growth has largely come from the mining sector and there was need to support the manufacturing sector to boost contribution to the gross domestic product.
"One of the major drawbacks to the growth trajectory is low investments and the country needs to ensure that investment targets set in the Medium Term Plan (2011-2015) are achieved," he said.
But this comes with specifications such as ensuring that as the economy grows there is need to transform the domestic economy from exporting predominantly raw materials to finished goods.
Value addition would enable the country to export goods at better prices and in so doing increase the export bill. The conference seeks to increase exports as espoused in the MTP and industrial policy.
Commenting on the same issue yesterday, Reserve Bank Governor Dr Gideon Gono lamented the level of imports into Zimbabwe and called for measures to capacitate local industry to be able to produce.
"We remain very worried by the extent and level to which we are depending on imports, particularly of finished products. We cannot build a strong economy by exporting jobs. We cannot build a strong economy by sub-contracting producers in other jurisdictions to produce for us that which we can produce ourselves," said Dr Gono.
He said the central bank's advice to Government was that there was need to strengthen local industry through legal and financial instruments in order to preserve foreign currency, create jobs and enhance liquidity. Zimbabwe still regards South Africa as a key source of FDI, especially in the manufacturing sector, because of a number of factors including its new status, conferred in 2011, as one of the fastest growing economies, the Brics.
The Southern African economy, with a GDP of US$400 billion, is well diversified with key economic sectors that include mining, agriculture, fishery, vehicle manufacturing and assembling.
It also has well developed industries in food processing, clothing and textiles, telecommunication, energy, financial and business services, real estate, tourism, transport and trade.
At the Zimbabwe-South Africa investment conference the targeted sectors include infrastructure (transport, energy, water, transport telecomms, manufacturing, mining, information communication technology, tourism and hospitality, financial services, agricultural processing (agro-industries).
Trade and investment between Zimbabwe and South Africa has every reason to thrive considering that the two signed a Bilateral Investment Promotion and Protection Agreement in 2011.
via The Herald