Taurai Museka | Credit insurance key to reviving SA–Zimbabwe grain exports

The recent decision by Zimbabwean authorities to lift the ban on the importation of maize and other grains was very much welcomed by South Africa's Minister of Agriculture, John Steenhusien, as one that reopens the door to vital cross-border trade. With South Africa expecting a robust 15.80 million tonne maize harvest this season - a 23% increase over last year - the timing is perfect to revitalise the trade relationship between the two nations.

However, the path to healthy trade flows is paved not just with good harvests and laws, but with finance.

The Trade Finance Gap

While the lifting of the import ban is a positive policy shift, the true barrier to maximising trade capacity has long been the lack of financing and credit insurance. According to the South Africa's Minister of Agriculture, John Steenhusien up to 80% of global trade is supported by financing or credit insurance. Without these tools, opportunities for growth are missed, and businesses lack the fuel to expand. 

In 2024, South African exports to Zimbabwe hit US$3.78 billion, with grains making up a significant chunk, approximately 15%. This figure, however, is believed to be artificially low because major South African credit insurers have historically been "off risk" on Zimbabwe, deeming the market uninsurable due to its political and economic volatility. Credit insurance is essential; it bridges the gap between exporters' need for guaranteed payment and importers' need for credit terms

A New Solution for a High-Risk Market

Zimbabwe's fluctuating import policies, driven by domestic production and economic conditions, mean that South African exporters must carefully assess risks when entering this newly reopened market. For the grain sector especially, robust export credit insurance is vital to mitigate non-payment risks.

While large insurance players remain hesitant to commit capital to high-risk markets like Zimbabwe, smaller, innovative firms are stepping in to cover the gap. A Zimbabwean actuarial firm, Invent Multiple Agents & Actuaries, developed a solution to provide insurance for exports from South Africa to Zimbabwe.

Invent claims that its proximity to the Zimbabwean market and its sophisticated actuarial analytics allow it to accurately predict which Zimbabwean importers are likely to pose a challenge to their South African counterparts. This innovative, data-driven approach aims to provide a reliable safety net for exporters, offering protection against non-payment risks stemming from political instability, currency fluctuations, or differing legal systems. The

Need for Reinsurance Support

Although Zimbabwe has a long-running sovereign debt exceeding $21 billion, the issue of default among private entities remains less clear. Invent's targeted solution addresses the immediate need for coverage.

To make a truly meaningful and sustainable impact, however, these innovations require reinsurance support from Africa's most highly-rated reinsurers. Securing this backing is the next critical step.

If consistent, reliable credit insurance can be broadly availed, it will not only allow for smoother, higher-volume trade but also provide a crucial underpinning for food security and consumer welfare across the region.

**Taurai Craig Museka is a Zimbabwe-based Trade Credit Insurance & Surety Consultant.