South Africans must not lose sight of the importance of Zimbabwe to the economy. This is the advice from African analyst Duncan Bonnett who says the South African economy remains intimately linked to that of the rest of the continent, but more so to its direct neighbours. “Zimbabwe remains a key export destination for South Africa and is one of the country’s top five trading partners on the continent, with trade statistics demonstrating the annual growth. In 2016, South Africa’s exports to Zimbabwe amounted to approximately R29.4 billion,” says Bonnett. “Exports doubled between 2010 and 2015 – from R15.5 billion in 2010 to R29.4 billion in 2016. That is quite significant.” Bonnett says what is also worth bearing in mind is that the bulk of these exports are value-added goods such as plastics, rubber, chemicals and vehicles. “We have also increased the exports of basic food stuffs. Possibly 70 to 80%, even higher if we take the food exports into account, are value-added products.” This, he says, does not include the huge amount of informal trade that happens between the two countries. Bonnett says despite the political tensions in both countries the ties to Zimbabwe remain strong and South Africa has much vested in its neighbour’s successful transition from the reign of Robert Mugabe to that of Emmerson Mnangagwa. “We are guardedly optimistic at present about the changes we are seeing in Zimbabwe. The pronouncements coming out of the government are what one wants to hear. How far they are prepared to go and how quickly the donor community comes back on board, however, remains to be seen.” He says in South Africa the rhetoric of change has been broadly welcomed. “Interest in Zimbabwe has been on the increase, but that is not necessarily new as it has been a trend prior to the government change at the end of last year.” But companies are watching developments closely. “I think most people are waiting to see if the talk is turned into action. It is still too early to say if Zimbabwe is out of the woods,” he says. “From a trade perspective policy certainty is crucial. The past few years in Zimbabwe we have seen major policy fluctuation with much of it off the cuff. Any return to policy stability rather than the populist waving of wands will be much welcomed by trade.”
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Most people are waiting to see if the talk is turned into action. – Duncan Bonnett
