By Dr Davison Todson Gomo
UNDOUBTEDLY, trade and investment flows are a critical determinant of how successful an economy can grow and indeed, to continue on a growth path subject to the kind of business environment that exists, the support services provided by the state, the level of market knowledge and the systems that exist to facilitate business in general and broad terms.
Recent history demonstrates beyond doubt that most poorer parts of the globe have had serious difficulties in achieving decent economic growth rates as well as their projected sustainable development goals although there has been some noticeable shift in some countries that have pursued a vigorous export strategy while maintaining steady inflows of FDI. The challenges that contribute to this state of affairs are many but not insurmountable. It is precisely this background that motivated the setting up of the US – Africa Trade Council.
Ordinarily, trade promotion has largely been dominated by state institutions most notably, the Trade Promotion Councils and/or Trade Missions attached to embassies. The trade missions have served their purpose and cannot be ruled out as effective means of linking up businesses between two or more countries, but given the radical changes that have taken place in the recent past driven by information communication technologies, innovations and the power of new ideas and knowledge; there is need to invite more and more trade and investment promotion entities that are made up of practitioners and experts in global business practices, entrepreneurs, researchers and policy makers for the purposes of engaging and exchange of real time knowledge designed to enhance global trade and investment flows that impact positively on economies of the collaborating countries
The US – Africa Trade Council was created to deal with some of these challenges and to focus on creating awareness of opportunities that are available in the collaborating and cooperating countries. Lack of knowledge of markets that exist and offer opportunities, the appreciation of regulations that govern different sectors of the economy, the business culture and the availability of useful information that is easily accessible all go to define and shape how countries conduct business between or amongst themselves for the ultimate benefit of the participating firms and the national economy.
The objective of the US – Africa Trade Council is to conduct regular business workshops that are graced by successful entrepreneurs, policy makers, scholars and other key stakeholders. So far, very successful workshops have been held in specific areas of interest in different African countries which include Zimbabwe and as I write this article, a workshop is going on in South Africa on interesting aspects of business and to a large extent, questioning the current business models regarding their appropriateness to the demands of a modern and globalising world.
The promotion of investment and trade flows between the USA and Africa has immense business potential to both sides especially given that Africa has a growing middle class and a young population. It is also not a secret that Africa is home to huge natural resources and vast agricultural land and up until now, this space has been open to large US firms and the business structure has largely been characterised by a one-way traffic because of the size and global dominance of the US economy.
This trend is slowly altering because there are a number of emerging countries that are doing well and may with time, breach the traditional dividing line that separate the North from the South particularly with regards to economic growth and development.
While the USA still maintains Economic sanctions on Zimbabwe, there is still room to develop productive economic linkages based on well established knowledge of the requirements of specific economic sectors that have unavoidable needs for products and services from the Zimbabwe and vice versa.8
The traffic of information on goods and services must be active to encourage informed decisions. Zimbabwe may have an array of products and services of the right quality and price but as long as there is little or next to no information on where these are, the rules governing the export of such goods, the logistics and other incidental business considerations, the bottom line is that exports to the USA may remain negligible.
It is important to note that just because there are current political problems between the USA and Zimbabwe, it does not follow that there is no business interest on Zimbabwe. The current challenges will fizzle away with time. It makes a lot of sense for some kind of engagement to take place and continue at private business level albeit with the knowledge of the state. Meaningful interface between and among independent trade and investment promotion groups must continue to allow them to share and disseminate country specific information across continents in order to ensure the availability of key and up to date business information
It is in Zimbabwe’s interest to promote exports to the USA for very obvious reasons and equally to invite those firms in the USA that may wish to invest in Zimbabwe. A combination of the two-pronged strategy will boost export receipts while creating job opportunities and new technology from invest inflows from FDI.
Today, Zimbabwe is in need of new technology, robust research and innovation capabilities to build a huge competitive edge over its competitors. Any effort to encourage trade between the USA is welcome especially given the current government position on maintaining positive relations with all nations of the world.
Trade if successful, drives economic growth, has potential to raise incomes and the general standard of living of the population. For years Zimbabwe was hampered by a toxic political e environment. We are now in the middle of a serious transformation driven by the Second Republic anchored by the National Development Strategy 1 and Vision 2030.
While government has strong trade and investment institutions, private institutions have an important role to play and the US Africa Trade Centre intends to play its role in that regard effectively. The interactions to date have gone well and more is set to be achieved in the short to the long term.
Dr Davison Todson Gomo is a Member of the Advisory Board