Farai Mabeza, Senior Staff Writer 
THE Export Credit Guarantee Corporation (ECGC) says it can assist all exporters, regardless of scale, to access new markets under the African Continental Free Trade Area (AfCFTA).
ECGC is a wholly-owned subsidiary of the Reserve Bank of Zimbabwe and a registered short-term insurer.
According to ECGC, its export credit insurance is designed to protect Zimbabwe’s exporters from losses that may arise from a variety of commercial and political risks inherent in all export transactions.
“Traditionally, Zimbabwean exporters have been exporting to countries such as Botswana, South Africa and others within the Sadc region but with the opening up of the African Continental Free Trade Area it means they are now going to be exposed to new markets and the need for export credit insurance cannot be over-emphasised.
ECGC is wholly-owned subsidiary of the Reserve Bank and a registered short-term insurer
“This protection will also enhance their capacity to compete in the international markets and enable them to break into new markets, introduce new products and take up new buyers,” ECGC head of operations, Andrew Mafukidze told The Financial Gazette recently.
“So, the call to those that are venturing into new markets is to access export credit insurance which would protect them against the risk of non-payment by buyers in these new markets which they do not have experience with.”
Mafukidze said the various insurance products do not offer an additional cost burden.
“The cost of the premiums is affordable. We want Zimbabwean exporters to be able to do business without the cost being a hindrance by increasing the cost of exporting. Apart from indemnification in the event of a loss, ECGC also does an assessment of the buyers’ creditworthiness, information, which ordinarily the exporter may not be able to get.
“We also help with collection when an account has gone into default. The policy can also be used as collateral security with financial institutions,” Mafukidze said.
“We cover all businesses from micro and small to medium enterprises to large corporates. We insure up to 95 percent for the SMEs.”
This comes amid concerns from the Treasury that the complete re-dollarisation of the economy would make it difficult for local businesses to be competitive in the AfCFTA. The Zimbabwe dollar’s depreciation against major currencies has led to fears of re-dollarisation, as confidence in the domestic unit has reached new lows with some formal retailers insisting on payment of some goods in foreign currency only.
In the informal economy, transactions are almost entirely in US dollars while the loss of value has created uncertainty for the country’s de-dollarisation plan. “In as much as the economy has somewhat dollarised, you will see that in terms of competitiveness, we are not going to be competitive; we are not going to be able to enter the AfCFTA with a strong currency.
“What is needed is a stable currency and that stable currency comes from production,” Finance deputy minister Clemence Chiduwa said recently.
“Business should brace up; we are going back to mono currency. What is left now is the official position to say this is official, but we are going back to mono currency. That’s what I can say for now.”
Chiduwa said the increased use of a strong currency like the US dollar in the economy is not sustainable in the long-term.
The AfCFTA — which was operationalised in January 2021 — is expected to open up the country to a market with a combined Gross Domestic Product (GDP) of circa US$3,4 trillion.
The regional bloc is set to offer high-potential opportunities in Africa in the automotive industry, agriculture and agro-processing, pharmaceuticals, and transportation and logistics.
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