Tawanda Musarurwa

CHECKPOINT DESK

ZIMBABWE’s exports have continued on a growth trajectory, rising to US$7,43 billion last year, from US$7,2 billion in 2023, according to the Zimbabwe National Statistics Agency (ZimStat).

However, this growth is largely tied to minerals and tobacco.

There are concerns that heavy reliance on commodities exposes the country to external shocks. The trade data shows that gold accounts for the biggest foreign currency earnings, followed by tobacco.

In fact, semi-manufactured gold (including gold plated with platinum) worth US$2,54 billion and tobacco (partly or wholly stemmed/stripped) valued at US$1,3 billion accounted for around 51,6 percent of the country’s total exports in 2024.

Similarly, products like nickel ores, ferro-chromium, chrome and industrial diamonds continue to make up a huge chunk of Zimbabwe’s exports.

Same destinations
The destination of exports from Zimbabwe has not changed much.
Neighbouring South Africa remains a key market, accounting for nearly 30 percent of total exports last year.

The United Arab Emirates (UAE) has emerged as a critical hub.

Trade between Zimbabwe and China also continues to grow, driven by Beijing’s appetite for local chrome and nickel ores — critical inputs for the global electric vehicle and steel industries.

Overall, South Africa, the UAE and China account for over 80 percent of Zimbabwe’s total exports, which might indicate an unhealthy exposure to the three markets.

Of the US$7,43 billion generated from exports in 2024, 95 percent was from the top 20 export markets: the UAE, South Africa, China, Mozambique, Zambia, Hong Kong, Netherlands, Botswana, Italy, India, the United States, Kenya, Egypt, Indonesia, Belgium, Germany, the Democratic Republic of Congo, Vietnam, Namibia and Malawi.

What is in Zimbabwe’s export container?
The top export product remains semi-manufactured gold, whose value rose sharply over the period under review.

It is followed by nickel ores and concentrates, whose value experienced steady growth.

Flue-cured tobacco experienced modest gain. The rise in ferro-chromium exports was driven by demand from China.

And while industrial diamonds remain valuable, exports have been inconsistent.
Notwithstanding ongoing efforts to build domestic beneficiation capacity, value addition remains minimal.

The export data shows that Zimbabwe is still primarily an extract-and-export economy.

For instance, exports of nickel ores and concentrates (including of platinum group metals — PGMs) brought in US$472 million.

Exports of nickel mattes, including PGMs, a more processed form of nickel, yielded US$989 million, which indicates that downstream processing is not scaling fast enough.

While last year’s record-breaking export performance is worth celebrating, three critical challenges stand out.

First, over-reliance on commodities means Zimbabwe is at the mercy of international price swings. A dip in global gold or tobacco prices could erase billions in trade earnings.

Second, geographic concentration increases Zimbabwe’s exposure to political and economic changes in key markets.

And third, under-diversification leaves many export sectors underdeveloped, from manufacturing to services.

First glimpse of 2025
Latest trade figures from ZimStat for January and February indicate that the same momentum and pattern continues.

Experts believe a targeted industrial policy, investment in beneficiation and export diversification will make the growth sustainable. Zimbabwe needs to build new industries, diversify products and broaden partnerships.

But there are positive signs.

Prior to 2018, the UAE was not among the country’s top 10 export destinations.

It has, however, evolved into the country’s biggest trade partner in 2024, accounting for 36,7 percent of Zimbabwe’s exports, at US$2,7 billion.

Behind the UAE are traditional top trading partners South Africa at US$2,15 billion (28,9 percent) and China at US$1,36 billion (18,3 percent). In recent years, the Government has made deliberate efforts to strengthen bilateral ties with the UAE, starting with the signing of the United Arab Emirates-Zimbabwe Bilateral Investment Treaty in June 2018, which was ratified in November 2020.

There have also been several bilateral engagements between the two countries.
President Mnangagwa attended the Fifth Global Business Forum on Africa in 2019, as well as the World Government Summit in February last year.

And in another key development, the Zimbabwean embassy in Abu Dhabi in January 2024 opened a consulate in Dubai — the capital of the emirate of Dubai, which is one of the wealthiest of the seven emirates that constitute the federation of the UAE.

This was a move that further enhances relations between the two countries.

Zimbabwe’s ties with its traditional partners have also improved.

Trade between Zimbabwe and the United Kingdom, for example, declined to a low of £126 million in 2021, from a peak of £461 million in 2018. But latest figures show an upward trajectory.

According to the UK’s Department for Business and Trade, total trade in goods and services (exports and imports) between the UK and Zimbabwe was £411 million in the 12 months to September 30, 2024, an increase of 24,9 percent or £82 million in current prices from the same period a year earlier.

Of this £411 million, total UK imports from Zimbabwe amounted to £205 million, an increase of 26,5 percent or £43 million in current prices from a year ago.

Zimbabwe’s recent export gains reflect both opportunity and vulnerability. The required structural shifts involve expanding manufacturing, investing in processing industries and broadening the country’s trade portfolio beyond familiar partners.

ORIGINALLY PUBLISHED IN THE SUNDAY MAIL – https://www.heraldonline.co.zw/zims-impressive-export-growth-risks-and-opportunities/