Zimbabwe: Zim Businesses Eye Zambian Market

10 July 2019

At a time local businesses have struggled to establish a sound footing in the regional export markets, Zimbabwe is shifting its focus towards expanding into the neighboring Zambia, one of the fastest growing economies in the region.

Currently, Zimbabwean businesses have only contributed one percent to Zambia's total imports with South Africa the most dominant player in that market.

According to investment and trade promotion group, ZimTrade, which did a survey on the Zambian market, there are massive business opportunities for local players to tap into, in areas of mining, supply of mine equipment, food and retail and manufacturing among other sectors.

"Because of our proximity, we are only 500 km from Lusaka, so in terms of accessibility we are very close as compared to other countries like South Africa, India and China but they are getting supplies into that market before us," ZimTrade, Market Information Manager, Anne Bake said at the ZimTrade, Zambia Market Survey seminar today.

"Zambia has 6 percent of the world's copper reserves and according to the international copper support group, in 2015 they churned out 711 000 tonnes and in a space of three years and they have managed to add 150 000 tonnes more,"

"In 2018 they had 862 000 tonnes of copper and you can imagine with one company like Barrick Gold Corp's Lumwana earning about 224 million Euros per year in copper alone, how much more is being earned by other companies? So that shows that their economy is growing at a very fast pace so it's a good time for us to position ourselves," she said.

Zambia has also taken positive strides in its investment reforms, anticipating improved investment. With its one stop shop, bonding all its investment agencies, it only takes 24 hours to register a company online from anywhere in the world.

But Zambia's success story is far from finished. A lot of construction work is happening particularly in roads and basic infrastructure such as shopping malls and modernizing its airports which also presents opportunities in steel and cement supply.

This has attracted continental industrial heavyweights such as Nigerian billionaire, Aliko Dangote's Dangote Cement Plc, which has set up plants in Zambia.

This has been the case with South Africa's multi-national retail giants, Shoprite and Pick and Pay stores.

However lately, companies such as Kefalos Foods, a Zimbabwean dairy products producer and Associated Foods Zimbabwe (Pvt) Ltd have made inroads into this burgeoning market, and are growing their footprints at a faster rate than earlier anticipated.

Kefalos Foods, for example, in just three months since it started exporting its range of cheeses and yoghurts into Zambia early this year, is now distributing to over 20 supermarkets mainly at Shoprite and Pick n Pay retail stores.

"Our taste profile is similar to that in Zambia. We haven't really done much in advertising or marketing but we have been able to move our products and attract more customers in Zambia within a short space of time," Kefalos Foods, representative at the seminar said.

Associated Foods Zimbabwe early this year opened a warehouse in Zambia and has since found itself a distributor in June, who is now selling their products at Shoprite shops in Lusaka.

But back home, more and more companies are failing to penetrate the export market due to a number of challenges chief among them, low production, uncompetitive cost of production and substandard quality of goods.

But foreign currency challenges in the country have worsened the situation for local producers yet the country affords as much foreign currency to import goods.

In 2018, Zimbabwe imported goods worth US$ 6.85 billion against exports of just around US$ 3.5 billion.

"It's an egg and hen situation," Zimtrade CEO, Allan Majuru explained.

"The reason companies are failing is that they don't have foreign currency to import the raw materials so what we are simply doing is to try to get them in the market , tap into the market, grow that market and all the foreign currency requirements will be there,"

"So if we concentrate to doing business locally then we don't get the foreign currency to sustain our businesses , so the idea is for them to export and be self-independent , generate their own foreign currency, buy their own raw materials and then we export , so for me, we have the potential," added Majuru.

However, Zimbabwean businesses are expected to leverage on cordial relations existing between the two nations, while partnering in various economic sector ahead of the Continental free Trade Area diminishing trade barriers.

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