eBusiness Weekly
Michael Tome
LOCAL exporting firms have implored Government to sort out limitations posed by some non-tariff barriers as they are impeding Zimbabwe’s growth potential in export business.
Non-tariff barriers according to exporters were overshadowing the duty exemption advantage amongst the Southern African Development Community (SADC) countries and they implored local authorities to address the issues timely in order to encourage Zimbabwe’s trade with its regional counterparts.
SADC defines a non-tariff barrier as any obstacle to international trade that is not an import or export duty.
In 2005, SADC introduced a process for identifying and eliminating non-tariff barriers in conjunction with the Common Market for Eastern and Southern Africa and the East African Community (COMESA). As part of this process, the SADC Secretariat developed a mechanism to ensure disputes over non-tariff barriers can be addressed online, allowing for timely resolution but some of the problems continue to persist in Zimbabwe.
Participants at the just-ended ZimTrade exporters’ conference buyers’ seminar said late reflection of transactions when dealing with Zimbabwean banks was the chief among a myriad of challenges limiting the flawless conduct of business.
They indicated it was taking up to 10 working days to successfully process a single transaction compared to just 24 hour-time frame experienced when dealing with other countries from the region. They said this was compounded by constant frustrations caused by customs delays at the ZIMRA manned entry points saying it was limiting the overall competitiveness of Zimbabwe’s exports into regional markets as they implored the revenue collector to fine-tune some of its border processes to avoid the lengthy delays being experienced at the country’s ports of entry and exist currently.
Speaking during the conference, Nartbridge Zambia representative, Newton Magoronga, highlighted the need to address some of the barriers on the policy level in order to get the best results from the regional trade encounters.
“Payments are taking too long to reflect in Zimbabwe, it is frustrating in a big way because right now the standard practice is that money should reflect within 24 hours in whatever country that it is sent to, but in Zimbabwe, you can spend 10 working days exchanging emails asking if the other party has received payment.
“We need to discuss some of the challenges so that we are assisted on policy perspective as to how best it can be dealt with so that we can take advantage of the regional market,” said Magoronga.
He said the Asycuda process on the Zimbabwean borders was hectic compared to some of the regional ports of entry and without doubt, this was frustrating and had a ripple effect that might lead prospective exporters to shun exporting if they consider custom processes that are annoying.
Brands Africa Malawi general manager, Elvis Madekutsikwa, said when local companies export into new markets, a big budget is required for product marketing, but local firms were finding it hard to advertise their products, which he alluded was an imposing obstacle to product visibility in the new markets.
“When you bring your product into Malawi for instance it is not going to be sitting on the shelf by itself because you will be competing with other global brands, thus need for a marketing budget, so if you export your product there is need to market because no matter how established your brand is in Zimbabwe the new market might not be knowing of your product.
“One of the biggest excuses that you will get is RBZ would not allow us to pay for marketing because it will be considered as externalisation, it is something that we need to look at from a policy perspective,” said Madekutsikwa.
Reserve Bank of Zimbabwe (RBZ)director: Exchange Control, Farai Masendu however clarified that it was permissible for local firms to spend on marketing campaigns outside Zimbabwe, but explained that they needed to have paperwork for them to perform the marketing.
“The current regulatory framework allows local entities to enter into marketing agreements with their foreign counterparties. What is critical to have is a marketing agreement that is registered with the exchange control, which allow companies to pay for any marketing expenses for their product.
“So the critical thing is registration you cannot just have your funds deducted offshore without any approval, what you need is that agreement. We have allowed done it with the tourism sector, we have seen agency marketing agreements of up to 7,5 percent commission on the turnover that is generated from exports,” said Masendu.
Non-tariff barriers to trade are trade barriers that restrict imports or exports of goods or services through mechanisms other than the simple imposition of tariffs.
SADC’s Protocol on Trade requires the Member States to implement measures eliminating all existing non-tariff barriers and to refrain from adding any new ones.
To ease this situation, SADC has promoted membership in a Customs Union, which unites all Member State customs policies, thereby reducing delays at border crossings.
