Zimbabwean buyers eye Chinese market

29 July 2010

29 July 2010 | Nick Martindale

Purchasers in Zimbabwe could benefit from new sources of supply and cheaper products if the government pushes ahead with closer trading links with China.

A meeting earlier this month between government officials from the two countries resulted in a pledge to move towards greater economic cooperation. China also committed to providing $1.5 million (£959,000) for the construction of a hospital in rural Zimbabwe.

Nyasha Chizu, CIPS Zimbabwe branch chair, said: “Zimbabwe can access good quality and cheap products from China.

“Chinese organisations have big production runs and can benefit from economies of scale. Generally, the Chinese labour market is cheaper compared with other first-world countries so production costs are lower.”

But he added that sourcing from a wider supplier pool would require companies to invest in supplier appraisal processes.

“Buyers need to understand their source of supply to ensure that they protect their organisations and customers from counterfeit products,” he added.

Ronald Mlalazi, education manager at South Africa-based procurement training provider Commerce Edge, warned that sourcing from China would be a “nightmare” for buyers.

“There are very limited direct flights to Zimbabwe, which increases the risks for buyers and companies in terms of long lead times, high shipment costs and long queueing, while bulk shipments are limited due to cargo regulations.”

In recent years China has made a number of investments in the infrastructure of Zimbabwe, including projects in the energy, agriculture, manufacturing, transport, tourism and water sectors.

The move towards closer ties with China follows the failure of EU delegates and Zimbabwean ministers to agree to restart engagement talks at a meeting earlier this month, after the three main political parties in Zimbabwe agreed a power-sharing arrangement.

In 2009 Zimbabwe signed the EU/Eastern and Southern Africa interim economic partnership agreement, which was designed to open the way to closer trading links.

But the EU wants Zimbabwe to implement democratic and economic reforms, including boosting industrial output and implementing a more business-friendly cost structure, before it commits to closer cooperation.

Chizu said progress was being made towards implementing political reforms and said the chances of closer cooperation with the EU in the future were very high.

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