Zimtrade, the country's premier trade promotion body, yesterday signed a Memorandum of Understanding (MoU) with the Senior Experten Services (SES) - a Germany based firm - which will see local companies mainly SMEs getting technical assistance in their manufacturing processes. Through the technical assistance, the products SMEs produce will now meet standards demanded by the targeted international markets.
SES is a volunteer organisation for retired Germany experts with vast experience in the manufacturing value chain including processes design, factory floor layout, production technologies, materials handling and product design, among others. The experts are expected to train local SMEs on how to produce quality export products and generate foreign currency for the country. ZimTrade board chairman Mr Lance Jena, said the MoU has been signed at a critical time when the country is battling to increase exports and shore up its dwindling foreign currency reserves.
"The SES initiative is critical from both an import substitution and export growth perspective. The partnership being solemnised here . . . will, indeed, positively impact on the competitiveness of our products, not only in export markets but locally, as companies will be assisted to produce more efficiently. This intervention will assist to reposition our industry, especially SMEs, to become key drivers of export growth," said Mr Jena.
The recent manufacturing sector survey done by the Confederation of Zimbabwe Industries (CZI), shows that SMEs are operating at below 37 percent of their installed capacity largely due to lack of skills. Mr Jena said the MoU is part of ongoing efforts to enhance productivity and export competitiveness of the manufacturing sector. He added that the country's product mix needs to be diversified given that value added exports are contributing less than 20 percent of total national export proceeds.
"As a matter of economic principle, it is dangerous for our nation to depend on commodities as we are prone to global price fluctuations since we do not determine the price. We, therefore, need to grow the contribution of value added exports and we can only do so through such initiatives," said Mr Jena.
Germany Ambassador to Zimbabwe, Dr Thorsten Hutter, who attended the signing ceremony, said it was critical to engage the experts as they would offer invaluable experience to local producers. Dr Hutter said Zimbabwe's decision to be part of the senior expert service programme for many years, is "very wise" and forward decision. He added that the signing of the MoU will have far-reaching benefits for the country in the future.
"My experience is that trade has to start so that it creates a business relationship. That is why ZimTrade is important, and when you start to have higher volumes of trade, that is when the issue of investment starts to come up. What can we do to improve trade? As you know, Germany does not have its own sovereign trade policy because we are part of the European Union, but of course we are not a small member state of the European member states.
"In fact, when it comes to economic issues and trade issues, we are the largest member state of the European Union; that is why we take strong interest in opening up trade relations with other partners around the world. We do have an economic partnership agreement between the European Union and Zimbabwe, which is forward looking and which opens up opportunities for trade. So, we in fact encourage trade, we encourage Zimbabwean exports into the European Union under no obstacles," said Dr Hutter.
However, he encouraged local producers to comply with EU standards, which are mainly health and environmental, before they think of exporting. SES was represented at the signing ceremony by country representative Mr Bernd Doppelfeld. Since 1983, the SES - which is based in Bonn, Germany - has completed more than 40 000 voluntary expert assignments in over 160 countries, with approximately a third of the placements being in the home country.