Standards: Panacea to exports growth

08 Sep, 2017 - 00:09 0 Views
Standards: Panacea to exports growth

eBusiness Weekly

HARARE. — As the smoke thundered in Victoria Falls last week, leaders from the local business fraternity were gathered for the 4th edition of the Business Leaders Conference which was hosted by the Standards Association of Zimbabwe. The event was being held under the theme: Standards — A building block for a sound national and quality infrastructure.  A befitting theme.

The recent outbreaks of serious avian influenzas affecting local poultry are good examples of how standards can impact trade and how collective efforts should always be harnessed to maintain standards. Following the outbreak, virtually every country banned poultry imports from Zimbabwe. While the outbreak had been identified from just one poultry producer, all other poultry producers’ supplies were also banned by other export markets, in line with the World Trade Organisation’s sanitary and phytosanitary standards.

We can also cite the failure of local cattle producers to export beef to Europe; despite the country’s signing of the Economic Partnership Agreement with the European Union nearly a decade ago, giving Zimbabwe duty free and quota free access to European markets.

Zimbabwe has been having challenges in meeting basic standards stipulated before being allowed to resume beef exports to the lucrative European Union; which were suspended in 2001 after an outbreak of foot-and-mouth disease.

Those who have gone through the provisional driving license test may agree that Zimbabwe is a cattle country and that there is local capacity to grow exports through enhanced beef production if the right standards are met.

But between now and then, Zimbabwe will continue lose out on potential revenue it could be earning from beef exports. The graph below shows that the country’s export of meat has been insignificant since 2001.

In light of the above, upgrading standards will therefore be instrumental in reviving the country’s export markets and reclaiming its former glory. This is happening at a time when government is planning to launch a National Exports Policy and it is important for that policy to enshrine issues to do with quality and standards.

There has also been talk about establishing a National Quality Standards Regulatory Authority to manage the standards of local products.

Although the government has been implementing Consignment Based Conformity Assessment in order to reduce hazardous and substandard imported products and improve customs duty collection, there are still some challenges associated with border porosity and scope of the work being done. Bureau Veritas which was appointed by the Ministry of Industry and Commerce to verify and assess conformity of goods is only doing so on a narrow range of products.

In total, just about 32 classes of products from different sectors are monitored by Bureau Veritas when Zimbabwe actually imports thousands of classes of products. The creation of a body that ensures product quality is therefore necessary. At the moment, existing organisations such as Standards Association of Zimbabwe only certify organisations that voluntarily apply.

And out of about 5,000 companies with the potential to get certified in Zimbabwe, only 140 companies are currently certified, which shows lack of commitment to issues of quality by the majority of companies.

And with the protectionist measures that have boosted the demand for local products, some local producers are just not taking issues to do with standards and quality seriously, knowing that people will still buy their products anyway. And if that mentality is allowed to kick in, it will inculcate a culture of irresponsibility that can only succeed in closing doors for export market opportunities for the country.

However, the development of product standards and their widespread adoption can play an instrumental role in facilitating transactions and enhancing trade, both domestically and abroad.

Standards facilitate the interoperability of products and systems; and have the potential to actually extend and enlarge the market; which help determine the efficiency and effectiveness of the economy.

Industrialists can also agree that standards are an important vehicle for the development and diffusion of best practice technologies and can make a big contribution towards lifting productivity and promoting sustainable economic growth. And more importantly, standards also serve to give consumers greater health and safety protection.

In general, standards can have national, regional or international scope. National standards in Zimbabwe are currently fragmented and located in various government ministries and statutory bodies and the coming in of a regulatory standards body is probably going to harmonize them. By design, national standards can be used by everyone, but are more prominent for the local market actors. They also take into account preferences of actors on the demand side. Production in compliance with national standards can serve as a quality signal.

On the other hand, regional standards are published in multiple countries of one geographical or political region. As a member of regional blocs such as COMESA and SADC, Zimbabwe has entered into a number of agreements where it is expected to meet standards. These trading blocs have also been calling for enhanced intra-regional trade, which means that more efforts should be made towards aligning to common standards in the region if local producers are to tap into opportunities that the region’s growing population present.

Zimbabwe is also a signatory of the WTO Agreement on the Technical Barriers to Trade which commits signatories to ensure that technical regulations, standards or testing and certification schemes adopted do not create disguised or unnecessary barriers to trade.

Often times, it has been noted that product standards and related conformity assessment requirements, especially where they are mandated by government authorities, can also be a critical factor impeding trade. The continual decline of tariffs as a result of multilateral trade negotiations and the proliferation of regional trade agreements have actually increased non-tariff barriers that often come in the name of standards.

But the bottomline is that, in the obtaining environment whereby export targeting is being pursued, it is imperative to also ensure that local production is set in such a way that products being made surpass the dictates of both local and international standards. Otherwise, it will be pointless to increase industrial capacity to 100 percent when the goods will not have takers. —FinX.

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