The Zimbabwe-South Africa Bi-National Commission which ended on Tuesday saw the two leaders President Emmerson Mnangagwa and Cyril Ramaphosa yet again pledged greater cooperation in various socio-economic areas.
For the generality of Zimbabweans, the tale of would-be benefits from similar inter-governmental engagements leaves a familiar empty handedness out of these seemingly genuine efforts to draw the much needed investment by the President Emmerson Mnangagwa administration.
Earlier this year, the country hosted the inaugural Zim-Botswana Bi-National Commission which was co-hosted by President Mnangagwa and his Botswana counterpart Dr Mokgwetsi Masisi concluding close to six Memoranda of Understand (MoUs) in energy, geology, mining and metallurgy, with much emphasis on the diamond sector where Botswana has considerable experience and expertise.
While the BNC with Botswana was a first between the two neighbors, this year’s edition of the ZIM-SA BNC was the third and there is definitely concern on what the previous editions have brought to the country.
South Africa is Zimbabwe’s biggest trading partner and since 2015, when the first BNC between the two countries took place there has been substantial investment trickling northwards.
Of note will be the influx of South African companies into the country in the last few years, particularly in manufacturing and retail sectors.
Following the promulgation of Statutory Instrument 61 of 2016, which sought to provide cushioning to local manufacturers against external competition, South African cooking oil and soap manufacturing company, Willowton set up a US$ 20 million plant in Mutare the same year.
Other investments from South Africa have come in the form of a US$82 million, Pretoria Portland Cement (PPC) plant in Harare’s Sunway City industrial zone, becoming one of the first factories to set up in this Special Economic Zone.
But has this been enough to support Zimbabwe out of woods?
Economic analyst, Gift Mugano noted that while economic cooperation and inward investment are what the Zimbabwean economy partially needs, the elephant in the room remains unchallenged, the trade deficit.
‘While we may record some investments coming in, the major impediment is how we curb a widening deficit with our biggest trading partner. We should be able to negotiate deals which also promote the companies already operating in Zimbabwe to get new markets outside our borders and help narrow this trade deficit,” said Dr Mugano.
South Africa has not been a fair trading partner with Zimbabwe.
Zimbabwe’s trade deficit with South Africa jumped to US$ 585.76 million between February and September 2018 as compared to US$ 152.1 million recorded the same period prior year, a 285 percent increase.
This confirms the trade relationship between the two neighbors is severely unbalanced.
Globally, this has been the major bone of contention between the world’s two biggest economies, the United States and China, where the Donald Trump administration has vehemently rebuked China’s position as the winner between in their mutual trade, negotiating an equilibrium scenario.
While both structural and infrastructural bottlenecks continue to hinder local companies’ competitiveness externally, Zimbabwe Government has done little to promote existing local companies find better markets in South Africa through the BNC.