COMESA,AN ‘untapped’ MARKET FOR ZiM | COMESA presents vast opportunities for Zimbabwean products, given its huge import bill, which stood at $165 billion in 2015.
Opportunities for increasing intra-COMESA trade can be identified in sectors such as construction, the entire agriculture value chain and food processing industries.
Zimbabwe has the capacity and potential to produce products such as chemical fertilisers, pharmaceuticals, agro chemicals, fish, dried vegetables, cement, footwear and packaging, which constituted 8 percent of COMESA’s import bill in 2015.
Zimbabwe’s total exports to the world stood at $2,7 billion in 2015, which is 1,6 percent of COMESA’s total imports. If Zimbabwe aims to capture as little as 3 percent of COMESA’s import bill, this will boost the country’s total exports to $5 billion.
According to the 2014 COMESA Annual Report, most of the member countries have been experiencing unfavourable terms of trade with the world. In addition, some member countries are facing the negative impact of multi-membership, where the characteristics of overlapping regional trade agreements conflict.
ZimTrade is urging Zimbabwean companies to fully utilise the COMESA preferential trade arrangement whereby COMESA member states offer duty free status to qualifying Zimbabwean products.
Currently Zimbabwe’s major exports to COMESA include fish, timber, plastic packing goods, cement, ploughs, and hand tools. COMESA has noted that trade constraints relating to health and quality standards of foodstuff commodities make up approximately 80 percent of the reported Non-Tariff Barriers (NTBs) among regional countries. These barriers have contributed to lower (less than 12 percent) intra-COMESA trade.
Specific examples of the NTBs include permit application processes that result in higher trading costs in addition to outright import bans.
COMESA is currently embarking on a project termed “Breaking Barriers Facilitating Trade” whose objective is to assist governments in monitoring both direct and hidden NTBs.
Zimbabwe, Zambia, Sudan, Malawi, Uganda, Kenya and Egypt are part of this project, which ultimately is targeting to reduce the cost of doing business within the COMESA region.
The project will also enable a predictable regulatory environment that allows competitiveness and increases market access opportunities.
Between 2001 and 2012, exports to COMESA contributed an average of 7,5 percent to Zimbabwe’s total exports and 3,8 percent between 2013 and 2015.
Given the historical performance and with the right initiatives in place, Zimbabwe can thus grow exports to COMESA to prior levels and beyond. The decrease in Zimbabwe’s exports to COMESA is also indicative of the general drop in intra-COMESA trade as well as a decline in COMESA’s import bill from the rest of the world.
The overall COMESA import bill dropped/ declined by 12 percent from $185 billion in 2013 to $165 billion in 2015.
This was partly attributed to the drop in oil prices.
According to the African Development Bank Group, in 2015 the COMESA region had an estimated total population of 527 million whose total GDP was $865 billion (an average GDP per capita of $1,643).
The total population of COMESA, which has grown by an average of 2,7 percent in the last decade, as well as the growing Gross Domestic Product (average 12 percent in 10 years) also provide an incentive for Zimbabwean exporters.