Publications
Partners
Harare - Zimbabwe’s export sector could benefit significantly from investor-friendly policies and resultant ramp-ups in mining and agricultural production, economists and other experts have said.
Data on Friday showed SA platinum miners – Anglo American Platinum [JSE:AMS], Impala Platinum [JSE:IMP] and Sibanye Gold [JSE:SGL] – to be among the top 20 list of major export earners.
The resource-rich southern African country is battling cash shortages, and has moved to tighten the screws on banking accounts activity and inflows for exporting companies. It has also had to restrict imports of most goods and commodities sourced from South Africa for distribution through retail and informal outlets in the country.
Analysts say Zimbabwe can grow its export sector if it encourages investment and growth in mining and agriculture.
Independent economist Moses Moyo told Fin24 on Friday that the export incentives Zimbabwe is introducing through incentivising export receipts with 5% of earnings need to be backed by policy certainty.
Export earnings
“An incentive not backed by the policy framework will not work effectively, especially for the mining sector which is a long-term investment sector," said Moyo.
He said the mining sector has the potential to grow Zimbabwe’s exports but is suffering from low interest by investors to expand operations and start new projects.
Implats-controlled Zimplats raked in $217m, Anglo Platinum’s Unki mine made $42.4m while the Mimosa mine – jointly owned by Impala Platinum and Sibanye Gold – contributed $85.4m in mineral export earnings.
The SA platinum miners contributed $345m or 15.4% to Zimbabwe’s export earnings of about $2.2bn while Fidelity Printers, which markets all of the gold produced in Zimbabwe, had earnings of about $324.7m.
Another expert involved with investment promotions in Zimbabwe, who wished to remain anonymous, added: "When government officials make pronouncements of taking over unused mineral claims like in the case of ZimAlloys and Zimplats, this disturbs investors and they will likely develop cold feet on new and existing projects in terms of expansion.”
Mining prospects
Finance Minister Patrick Chinamasa said in Parliament on Thursday afternoon that the other major export earners were tobacco processing companies, crocodile farmer Padenga Holdings and Bindura Nickel Corporation as well as tea producing and processing company Tanganda Tea. Pick n Pay’s [JSE:PWK] Zimbabwean partner owns Tanganda.
“Our top 20 exporters were largely drawn from the mining and agricultural sectors, mainly tobacco sectors, to some extent tea, and this accounted for 41.3% of our total exports as at 27 May, 2016,” Chinamasa said in Parliament on Thursday.
Analysts at Business Monitor International said in a second-quarter report on the mining sector in Zimbabwe that “new investment by both existing and new players” in platinum will allow the country “to capitalise on its considerable reserves”.
Zimbabwe’s platinum mining prospects could also benefit from “slowing production growth in neighbouring South Africa, where serious difficulties as a consequence of labour unrest and high energy costs will mean that the world's largest platinum producer will experience major difficulties in maintaining production” levels.
Zimbabwean investors – among them Tongaat Hulett, PPC, Lafarge, the platinum miners and others – have already been spooked by sudden shifts in policy by Zimbabwe and the announcement that gold, diamond and mining sectors will now be reserved for the state are likely to further disturb investors, a business executive said.
