Zimbabwe: exports to South Africa to take a hit
Zimbabwe’s biggest trading partner, South Africa, will in the next two weeks begin rolling out measures to ensure that 75% of procurement is local, meaning that Zimbabwean businesses exporting goods and services into the South African market face seeing their market shrink significantly.
Representatives from the SA government, business, labour and the community on October 31, 2011, signed a Local Procurement Accord designed to provide benchmarks, timelines and commitments from all the signatory constituencies on how the plan will be executed.
According to South African Department of Trade and Industry, the Preferential Procurement Policy Framework Act, which essentially gives legal effect to the accord, will come into operation from December 7.
Industrialists and market watchers believe that Zimbabwean businesses will take a serious financial hit, particularly at a time when fledgling local companies are beginning to find their feet after a decade of economic decline.
South Africa is Zimbabwe’s biggest trading partner and last year local companies exported $175 million worth of goods.
Virtually all sectors of the economy will be affected by the imminent measures from SA, as products that have been designated for the first phase of the procurement rollout include leather footwear, buses, power pylons, railway rolling stock, pharmaceuticals, set-top boxes, clothing, textiles and food and canned products, including office furniture and school furniture.
