ZIMBABWE has been overtaken by Mozambique as South Africa's biggest trading partner in the region.
Mozambique is one of Africa's fastest growing economies and this has seen South Africa turning east from her northern neighbour which has occupied the prime trading position since independence in 1980.
Investments worth more than R25 billion have been channelled into Mozambique by South African companies. Zimbabwean companies have also been leaving in droves to set up in Mozambique where opportunities abound.
Addressing a special National Assembly session in Maputo recently, South African President Thabo Mbeki said that Mozambique had become South Africa's largest trading partner.
"With R25 billion investment by South African parastatals and private companies, South Africa has become Mozambique's largest foreign investor," said Mbeki.
Trade statistics for 2001 from South Africa show that in 2001 South African exports to Mozambique were valued at R5,72 billion, Zimbabwe R5,38 billion and Zambia R4,89 billion.
South Africa has taken over all the breweries in Mozambique. Mozambique's largest brewer, Cervejas de Mocambique (CDM), in which South African Breweries has a 78% stake, has bought the country's only other brewery, Laurentina.
BHP Billiton, the world's largest resources company, has as aluminium smelter - Mozal - in Mozambique.
The tourism sector is another area where the South Africans are big players and recently the ABSA group took over Banco Austral, formerly BPD (Popular Development Bank). South Africa's biggest sugar producer Illovo, has vast operations at Maragra sugar project in Mozambique. Cellular services provider Vodacom has also targeted Mozambique as a new area of investment.
Zimbabwe's decliningpolitical and economic environment has been largely to blame for this shift.
Zimbabwe's high-risk status has seen a decline in cross-border credit guarantees, affecting Harare's export performance. Offshore financiers were reluctant to offer locals any corresponding lines of credit, resulting in trade partners preferring cash upfront.
This has been further worsened by lack of donor funding and the imposition of economic sanctions.
Over the past three years, Harare has continued to experience a net flight of portfolio investment.
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In 1997 portfolio investment stood at around US$32 million. The pattern has however changed with the country registering net outflows in the US$10-$15 million range over the past two years.
Investment analysts say the country has experienced a shrinkage in offshore trade finance.
"Total trade finance facilities, which averaged US$289 million during the first four months of 2000, had shrunk by 28% to an average US$209,5 million over the same period last year," said one analyst
"This reflects a general unwillingness of global financial markets to extend credit to Zimbabwe."
Zimbabwe is currently experiencing a crisis characterised by runaway inflation, foreign currency shortages, rising poverty levels and general decline in virtually all key sectors, thus pushing up unemployment.
Currently Zimbabwe's unemployment levels are believed to be above 65%.
