Our team provides expert advice in the development, implementation and analysis of public policy to support economic development. We rely on data-rich technical analysis and on-the-ground relationships to support successful policy reforms that drive private sector development in African markets.
The Local Content Policy: Making Domestic Markets Work Better For Local Businesses
Jean (29) is a peanut butter manufacturer in Zimbabwe’s capital, Harare. Unemployed, she started producing peanut butter as a business this year for the first time. AEDS is working with the Ministry of Industry, Commerce and Enterprise Development to create a local content policy that will facilitate a conducive domestic market for locally produced goods, stimulate jobs and save foreign currency.
Peanut butter manufacturing in Harare ‘Since the Ministry restricted imports, I noticed a gap in the peanut butter market. Zimbabwean peanut butter is of excellent quality, highly nutritious and palatable to the domestic market’s taste buds. The problem was cost. In Zimbabwe, it costs a lot to manufacture anything which meant it was unviable for me to run a business of this nature in the past. My peanut butter would have been more expensive than imported peanut butter and since consumers do not have a lot of money, I would not have been able to attract local consumers to my product. However, I took advantage of the prevailing foreign currency shortages which created a gap in the supply of foreign produced peanut butter, and have also resulted in foreign peanut butter now being very expensive on the domestic market. I am now producing peanut butter to meet that gap and because the demand created is quite big, I am able to meet economies of scale so my unit costs are low and I can price my peanut butter competitively on the domestic market. I’m happy because I haven’t been gainfully employed since I graduated 9 years ago, but in a short space of time, I have a job, I’m starting to get a small income, and next year I will need to hire some help to keep up with the orders. I participated in the local content research, and the way I understand it I think it is a great policy, it puts Zimbabweans back to work and that’s fantastic.’
The Local Content Policy aims to stimulate jobs, safeguard the positive developments that have been experienced by manufacturers and producers over the last 18 months and regularise Zimbabwe’s compliance to World Trade Organisation commitments.
AEDS is supporting the Ministry to implement an evidence based, co-creative approach to develop the policy, so as to ensure buy-in of private sector, joint ownership in the policy’s implementation and strengthened partnership between the public and private sector as Zimbabwe seeks to rebuild it’s economy and get its citizens working again.
National Export Strategy
Buoyed by the remarkable rebound in exports that was experienced after the dollarization of the economy in 2009, Zimbabwe in its 2012-2016 National Trade Policy (NTP) framework targeted to increase its export earnings by at least 10% annually from US$4.3 billion in 2011 to $7 billion in 2016. However, trade flows have been contracting. Exports have declined by 35% from 4.3 billion in 2011 to US$2.8 in 2015. In 2016 exports continued to decline. At the same time, the import bill reduced cumulatively by 30% from US$8.9 billion in 2011 to US$6 billion in 2015. This has resulted in some improvement of the prolonged trade deficits which stood at US$3.2 billion in 2015 down from US$5.1 billion in 2012. Trade deficit continues to exert pressure on the current tight liquidity situation, the country’s foreign exchange reserves and the balance of payments position.
Against the background, the Ministry of Industry and Commerce then engaged Prof Albert Makochekanwa and Dr Gift Mugano from AEDS to undertake the development of National Export Strategy whose major aim is to make Zimbabwe globally competitive with a view to expanding current levels of exports by placing emphasis on value added export, diaspora remittances and services. To achieve this, the NES was developed with a view of coming up with competitiveness strategies that will place Zimbabwe in the global economic arena as an equal trade partner and beneficiary. The implementation of this strategy is expected to result in increased export growth, leading to employment creation for poverty reduction.
The specific objectives of the NES are:
- To make the export sector a major engine of growth by maximising the growth of the sector and its contribution to overall economic growth as well as diversifying the export base;
- To maximise the export sector’s contribution to employment creation, rural development, gender equality and poverty reduction;
- To increase production and productivity as well as the level of value addition within the identified export sectors, namely: Pharmaceuticals, Horticultural, Food and Beverages, Wood and Furniture, Fertilisers, Iron and Steel, Arts & Crafts; Garments & Textiles; Meat & Meat products; Leather & Leather products; and Minerals beneficiation.
- To improve the business environment and lower direct costs of doing business by removing bottlenecks to trade, developing an appropriate infrastructure and making available to exporters professional services in clearing, forwarding, packaging and labelling;
- To increase the range of export products; enhance skills capacity and use of technology to build export competency and ensure that exporters can penetrate the lucrative international markets;
- To provide exporters with a competitive trade finance facility; equip them with up to date specific market information to support their business decisions and ensure that they produce goods and services that meet international standards;
- To ensure that the strategy support network is effectively coordinated and functional through a public-private sector partnership;
- To ensure that the service delivery network moves in tandem, is harmonized and provides exporters with the necessary institutional support.
Research on the Public Private sector Partnership in Zimbabwe
Aeds, Took Stock of the Public Private Sector Partnership in Zimbabwe, Reviewed the Current status of Zimbabwe’s Infrastructure with Special Focus on Water & Sanitation, Transportation, Energy & Information Communication Technologies, Identified the Missing Link, Developed Strategies to Address Challenges Facing the Infrastructures, Showcased the Role of the Private Sector in its Rehabilitation and set a Clear Plan of Action in the Context of PPPs & Drew Policy Briefs. This Work was financed by International Council of Swedish Industries (NIR Sweden) and coordinated by Zimbabwe National Chamber of Commerce, October 2011 – March 2012, Harare, Zimbabwe