DRC buyers give a nod to Zimbabwean products

23 May, 2021 - 00:05 0 Views

The Sunday Mail

THE high quality of Zimbabwean products and services is one of the top reasons why Lubumbashi in the Democratic Republic of Congo (DRC) is a lucrative market for Zimbabwean exporters.

This statement summarises conversations that came out of the Zimbabwe-DRC Trade Conference, which took place earlier this week.

The conference, which opened the ZimTrade-organised Zimbabwe Outward Seller Mission to the DRC, provided an opportunity for more than 25 participating local companies to create stronger linkages with buyers in the central African country.

The DRC Outward Seller Mission is part of activities that have been lined up to bring to fruition the economic diplomacy agenda currently fronted by President Mnangagwa’s Second Republic.

Another mission is also planned for Kinshasa soon, which will be preceded by the Zimbabwe-DRC Business Forum scheduled to take place on the sidelines of this year’s edition of the Zimbabwe International Trade Fair.

Pursuing these activities as part of the re-engagement agenda will improve Zimbabwe’s exports, which in turn will go a long way towards realisation of the Vision 2030, that of becoming an upper-middle income economy.

During the just ended Outward Seller Mission, several officials from the DRC noted that there is a growing interest in Zimbabwean products and services and that those looking to grow their exports in the country should consider creating strong business partnerships with locals.  Officials from the DRC further urged Zimbabwean companies to create partnerships that will establish a footprint for them in the market and allow them to take advantage of the vast population present in Lubumbashi.

The Provincial Director at the National Agency for Investment Promotion in DRC (ANAPI), Mr Raymond Ngwej, encouraged local companies to set up shop in the Lubumbashi, riding on the pedigree of Zimbabwean products.  Here, Mr Ngwej indicated that most industries in Zimbabwe are better developed compared to DRC and this alone creates opportunities even in the services sectors.

“You need to look beyond export of products,” said Mr Ngwej, adding that “Zimbabwe has a tourism industry that is advanced.”

“With more hospitality opportunities emerging this could be a gate way for exports of tourism services to the DRC,” he said.

Contrary to some conjecture about the risks associated with exporting to the DRC market, Zimbabwean companies were advised of the market potential that could be unlocked when working with locals.

In particular, the Katanga province in which Lubumbashi is located, is rarely in conflict.

As such, establishing partnerships with companies in Lumumbashi will go a long way in mitigating risks.

Understanding DRC import structure

Statistics from Trade Map show that the DRC imported total products worth US$6,67 billion in 2019.

This was dominated by machinery and mechanical appliances (US$1, 1 billion); electrical machinery and equipment (US$615 million); as well as pharmaceutical products (US$471 million).

Other top products imported in 2019 were vehicles and parts, articles of iron or steel, plastics, and inorganic chemicals as well as salt, sulphur, earths, and stone, plastering materials, lime, and cement. Zimbabwe’s exports to DRC are currently very low, and last year, they were largely dominated by plastics and articles of plastics, according to Trade Map.

However, there is room to increase trade to DRC by diversifying exports and targeting high demand products.

Export opportunities to Lubumbashi

Lubumbashi is also a town that carries many opportunities for Zimbabwean exporters.

The town, estimated to have more than two million consumers, is the mining capital of the DRC and a base for many of the country’s biggest mining companies. The mining sector in the Katanga region is composed of both large-scale mining firms and the small artisanal mining operations, presenting an opportunity for Zimbabwean exporters of mining consumables, engineering, and safety solutions.

The new exploration and expansion operations in Katanga region are driving demand for goods and services used in mining, building and construction as well as engineering services.  Further to this, the Haut-Katanga province does not have manufacturing companies and relies on imports which are imported through the Kasumbalesa border post between Zambia and DRC.  As such, one of the greatest advantages of Lubumbashi town is its proximity to the Zambian border, making the journey of transporting goods shorter and in some cases cheaper.  Buyers have already indicated willingness to import from Zimbabwe if prices are competitive against those offered by countries such as South Africa, China, Belgium, and India.

To capitalise on this demand, it is important that Zimbabwean companies concentrate on improving their production efficiencies so that they produce more at the least price possible.

Strengthening linkages among players in the entire value chain will also improve on the price and production competitiveness.

Further to the mining and manufacturing sector, there is high demand for processed foods in Lubumbashi.  Some of the products with potential include peanut butter, honey, sugar, cooking oil, bathing and washing soap. Local companies can also supply clear and opaque beer, non-alcoholic beverages, breakfast cereals, and dairy products.

Currently, South Africa and Zambia have a huge processed-foods market share in DRC.

Further to this, the DRC government has been moving towards modernising the country’s agriculture sector, creating opportunities for Zimbabwean companies to supply appropriate technologies. Required products that local businesses can supply include hand-held farming equipment, tractors, cultivators, and planters.

There are opportunities for agriculture inputs and supplements, focusing on smallholder farmers as well as established commercial farmers. For agricultural produce there is potential to supply tobacco, meat, sugar, cereals, cotton, vegetable, fats and oils, nuts, fresh fruits, and vegetables. In addition to products, there are also opportunities in the Lubumbashi mining sector to export services such as engineering, surveying, instrumentation, transport, plant maintenance, environmental management, and artisanal services. In the services sector, there are also opportunities for Zimbabwean professionals in areas like the medical field, teaching, hospitality and catering, motor mechanics and skilled agriculture workers. The Information and Communication Technology sector in DRC is growing, creating demand for support services such as programming, software support and network security.

Those seeking opportunities in these services sectors need to take note of language as French is the official language widely used in business.

The language requirement for services is also the same with products, which should be labelled in French.

Labelling in both French and English will maximise on sales as well as create seamless communication between Zimbabwean exporters and potential buyers.

Riding on export incentives to export to Lubumbashi

ZimTrade has, in the recent months, been exploring export opportunities in DRC, as demand is anticipated to grow following relaxation of trade restrictions by the African Continental Free Trade Area.

With great opportunity lurking on the African continent, President Mnangagwa’s Government recently introduced export incentives targeted at reducing the cost and burden incurred by local companies when they establish new markets.

The announcement came at a time when ZimTrade is increasing export promotion activities to ensure stronger linkages between Zimbabwean exporters and buyers from the region.  Previously, one of the challenges faced by exporters was the cost of developing new markets, hence the thrust of President Mnangagwa’s Government to make it as cost effective as possible for local businesses to develop new markets.  To promote exports, the Government provides for a deduction of an amount of any export-market development expenditure incurred by the exporter during the year of assessment.

Thus, local companies that are targeting Lubumbashi can now claim twice the amount spent on export market development.

Allan Majuru is ZimTrade chief executive

 

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