- UAE overtakes South Africa to become Zimbabwe’s top trading partner for the first time. Although total exports declined by 8,05 per cent in January 2022
- Trade and diplomatic relations between Harare and Dubai deepen
- Zimbabwe stands a huge chance to expand to the entire gulf region market with UAE as the gateway
The United Arab Emirates (UAE) ranks first in Zimbabwean exports for the first time. Although exports to UAE declined between January 2022 and December 2021 by 5,8 per cent, UAE still topped the list.
This is displayed in the latest trading statistical reports from the Zimbabwe National Statistics Agency (Zimstat). Such a development dovetails with the Second Republic’s schemes to propel an export-led growth strategy. In other words, Zimbabwe has great potential to expand its export footprint to the UAE and the entire Gulf region market using UAE as a critical gateway.
According to the agency, South Africa (SA) was the major trading partner with Zimbabwe. However, exports to South Africa were short of 5,9 per cent to UAE. So, UAE which had 36,4 per cent in January 2022 topped the rankings. Notably, the total value of exports amounted to US$632 million in January 2022 compared to the previous month showing an 8.05 per cent decline. During the same period, imports from South Africa stood at 39 per cent.
Trade experts have stressed the need for Zimbabwe to embrace value addition and beneficiation to diversify its export market and maximize export earnings. Zimbabwe’s main exports to UAE are precious stones and pearls, tobacco, edible fruits, macadamia nuts, bananas, avocados, citrus fruits, and various berries.
Zimbabwe largely imports value-added products from the UAE such as value-added precious stones, mineral fuels, electronics, essential oils, and cosmetics.
Meanwhile, Zimstat said exports to China increased to 12,3 per cent whilst imports went up by 15,9 per cent. According to the report, mineral fuels and oil products were major imports, They had 15,1 per cent compared to 21,5 per cent in December 2021.
The official Emirates News Agency reported that trade between UAE and the southern African country has increased by 300% in the last three years. During the Expo 2020 Dubai, President of Zimbabwe Emmerson Mnangagwa assured the hosts of his administration’s preparedness in strengthening trade ties.
“Be assured that my administration stands ready to deepen and cement our trading ties, taking advantage of the diplomatic missions recently established in our two capitals,” he said.
“The relations between Zimbabwe and the UAE are growing so fast in all sectors. Three years ago, our bilateral trade was only US$400 million, but it jumped in 2021 to US$1,6 billion,” he added.
Bilateral relations between the two countries improved after the UAE showed its benevolence. This was by sending aid in response to the Cyclone Idai storm in March 2019. Planeloads of humanitarian assistance were sent to Zimbabwe, which went a long way in helping victims and mitigating the impact of the cyclone. UAE also assisted the Southern African country’s fight against Covid-19 with a consignment of required medical drugs.
Early March, the new dispensation approved the establishment of a commercial consulate in the commercial hub of Dubai. Economic and trade attachés will operate in the consulate. This is an effort to complement investment promotion being done by Zimbabwe’s embassy in the UAE.
In a cabinet briefing published by The Herald on March 17, 2022, Minister of Foreign Affairs and International Trade Ambassador Frederick Shava said the development created an environment conducive to doing business.
“With the establishment of the consul general’s office, the environment in which they are to do business. We are very delighted that the cabinet has allowed us to establish that consulate in Dubai,” he said.
The same article reported three Memorandums that were signed. But, special to note is a Memorandum between the Ministry of Lands, Agriculture, fisheries, Water and Rural Development and the private office of H.H. Sheikh Ahmed Bin Faisal Al-Qassimi.
Some of the trade Agreements between Zimbabwe and the UAE
Earlier, President Mnangagwa announced an agreement between Zimbabwe and the UAE on the promotion and protection of investments. The agreement was signed in 2018 and later ratified in 2020. The purpose of the agreement was to bring non-business risks closer to zero. But, this does not guarantee business success and profits.
According to The Herald, external investors will get rights similar to local investors plus the rights to permit profits and remit their capital if they wind up the investments. The laid down rights and procedures are designed to promote investment. So, this will make investors feel confident that their rights and business will be fully protected.
News24 published a related article on September 8, 2021, reporting a memorandum of understanding between Dubai Gold and Commodities Exchange (DGCX) and Zimbabwe’s Victoria Stock Exchange (VFEX). In an interview with Bloomberg, the Chief Executive Officer of the local bourse Justin Bgoni said the agreement will see the establishment of a gold market. This will serve the needs of gold miners.
“The exchange will open in a bid to create a reference market that will see miners offered competitive prices,” he added.
This gave a boost to gold trading between the two countries. However, this was the second agreement of this kind DGCX signed in Africa. Similarly, The Dubai-based exchange once signed this with Financial Markets Regulatory Authority in Sudan.
As far as 2019 Forbes reported an interview with Zachary Campbell Smith. Smith is a geopolitical analyst based in Washington D.C. He has long documented investment opportunities and challenges in Africa. Responding to queries from Forbes he said some of the key factors that strengthen bilateral ties are economic liberalization policies.
“Strengthening of bilateral ties can be credited to the economic liberalization policies and policy implementation efficacy of the Zimbabwean Government,” he said.
UAE in other African Countries and military involvement
Dubai-based business news reporting company Zawya reported that UAE is involved in power generation and other digitalization endeavours in Algeria. Adding to the economic engagements UAE is also involved in military operations in Africa. According to the Al-Monitor article published on March 19, 2022, UAE supported Ethiopia in its war in the Tigray region. This was amid allegations of war crimes against the Ethiopian military.
As if this wasn’t enough, UAE offered to mediate the dispute between Egypt and Ethiopia. The dispute was over the latter’s Nile river dam. This shows how the UAE is growing ties in Africa.