FinX-Government is currently working together with South Africa to resolve the outstanding issues around a 1964 bilateral trade agreement, which the former suspended in 2007 but continues to use it in its favour because Zimbabwe had not done the same. The Trade Agreement between South Africa and Zimbabwe that entered into force on 30 November 1964 accords preferential treatment to goods and services in the form of rebates on duty and duty-free market entry. Some products including textile and clothing are subject to quotas and rules of origin when entering the two markets.

On a speech read on his behalf by Industry and Commerce director Stan Mangoma at the 2013 Clothing Indaba this morning, minister Welsh Ncube said government was working tirelessly on policy measures to effectively address the problem. “You may recall that prior to the suspension of this agreement South Africa used to absorb nearly 18% of the total exports in the sector. The situation is extremely stressful in that not only have the exports dropped to below 5% but the trade balance continues to be in favour of SA at 1:6.”

The two countries had agreed to finalise a joint report on the two visits with recommendations for discussion by the two ministers on the sidelines of a SADC Ministers meeting scheduled for next month. He said the report had been finalised and would be submitted soon. “The outcome will be announced in due course.” He added: “Obviously we will continue to engage our SA counterparts to ensure realisation of this goal.” Ncube said furthermore, government has in place measures that will establish a duty rebate system, which will allow the sourcing of raw materials not locally produced via the application of user friendly modalities.

He said it was extremely disturbing to note that current capacity utilisation level in the Clothing Manufacturing sector is just hovering below 30% not only because of the lack of affordable long term finance and competition from cheap imports but also because of the stringent rules of origin under SADC.

Government had also identified Midlands, Gokwe in particular as well as Harare are possible areas for industrial clusters as this was critical to the attainment of the Industrial Development Policy.

“As you are aware industrial clusters are increasingly being recognised as an effective means of nurturing the local industry’s main drivers of the country’s entire value chain as well as capitalise on the geographical concentration and interconnections of firms and ancillary units, procurement and marketing synergies.”

The cotton, textile and clothing value chain contribution to GDP had shrunk to just under 2% from about 5% (or $2.6 mln) in 2011 employing 8 000 people from 35 000.

“The situation has been further exacerbated by our insatiable appetite for imported products in particular cheaper Chinese clothing. What boggles the mind is that the raw product (cotton lint) including the capacity of local producers to meet local demand is available.”