From: barnhart@gagme.chi.il.us (Mr Aaron Barnhart)
Subject: IPS: ZIMBABWE: SOUTH AFRICA POSES A THREAT TO REGIONA
Originator: barnhart@gagme
Organization: Evanston, Illinois
Date: Thu, 1 Oct 1992 01:43:08 GMT


Copyright Inter Press Service 1992, all rights reserved.  Permission to re-
print within 7 days of original date only with permission from 'newsdesk'.

Reference: Trade & Finance; Science & Industry
Title: ZIMBABWE: SOUTH AFRICA POSES A THREAT TO REGIONAL MARKETS


an inter press service feature

by andrew zhakata

harare, sep 22 (ips) -- lying dormant for decades because of
economic sanctions now swiftly fading, south africa, the
regional giant, is now fully awake and threatening zimbabwe's
planned export-led growth.

with an economy already in the doldrums, south african
business is yet another challenge to zimbabwe's investment and
technology-starved industrial sector.

zimbabwe, the second biggest economy in the southern african
region after south africa, has over the years established
lucrative markets in southern and eastern africa.

but zimbabwean business people are facing stiff competition
in these regional markets from south african companies in
angola, botswana, kenya, malawi, mozambique, tanzania and
zambia, now that the country can trade openly after years of
isolation.

''these markets also happen to be zimbabwe's most promising
and the south african drive is giving zimbabwean exporters a
tough time'', says mike humphrey, director of zimtrade,
zimbabwe's new export-promotion authority.

farayi chamba, head of the confederation of zimbabwe
industries' (czi) trade development department, maintains that
although south africa is in the grip of a recession just like
zimbabwe, it still possesses several major advantages.

''south african goods are cheaper and have a competitive
quality. the country's exports are subsidised and the trade
terms are flexible'', says chamba.

zimbabwean companies are finding it very difficult to cope,
reeling already under the harsh effects of an economic reform
programme introduced by the government in 1991.

they are confronted with an inflation rate of 43 percent,
high interest rates and a savage liquidity squeeze.

incentives offered to exporters by the government last year,
including an export retention scheme which allows companies to
retain 25 percent of their export earnings to finance essential
imports, do not appear to be working. (more/ips)


zimbabwe: south (2)

''no export bonuses have been forthcoming from the
government which today owes industry 400 million zimbabwean
dollars (80 million u.s. dollars) in export bonuses'', jim
torond, president of the zimbabwe national chamber of
commerce, told ips.

zimbabwean exports have traditionally been consumer goods,
agricultural machinery and intermediate goods for industrial
clients. over the last decade they had done remarkably well.

according to humphrey, zimbabwe's total trade in east,
central and southern africa increased from about 17 million u.s.
dollars in 1980 to over 200 million u.s. dollars in 1990.

trade with south africa, one of zimbabwe's major trading
partners, rose from 75.4 million u.s. dollars in 1980 to 204
million u.s. dollars in 1990.

the south african competition has existed in the region for a
long time, but most of the trade with africa was done
underground in breach of an international trade embargo.

however, now with the ending of most western sanctions, south
africa has moved rapidly to forge trade and political links with
africa, the natural market for its exports of food, consumer
goods and machine tools.

like zimbabwe, south africa's manufactured exports are not
competitive in europe and regional markets hold the best
promise. major in-roads have been made by south africa
throughout the region.

south africa has participated in several major trade
showcases in africa. in 1991, 150 south african companies
exhibited at a trade fair in kenya, while 60 participated at the
annual zimbabwe international trade fair last year. this year,
35 south african companies exhibited at the all-africa trade
fair held in bulawayo, zimbabwe's industrial centre.

to finance its economic growth plans, zimbabwe's exports must
expand by at least 11.5 percent in real terms annually between
1992 and 1995 in order to bring in 11.3 billion u.s. dollars in
earnings by 1995, says dr bill moore, president of czi.

''but this target will be difficult to achieve, not only
because of the drought but also because of the increasing
competition in zimbabwe's most promising markets'', warns moore.
(end/ips/az/oa/92)