‘ACFTA will promote value addition’

THE African Continental Free Trade Area (ACFTA) agreement has huge potential to promote value addition in Zambia.

It is posed to resolve the challenge of overlapping, increase market access, stimulate foreign investment and competitiveness.

ACFTA could encourage diversification.

This is according to the Zambia Association of Manufactures (ZAM) Policy Analyst, Zondwayo Dume.

Mr Dume said the initiative had the potential to promote orderly and free flow of economic factors, highly efficient ventures and integrating of markets.

He said this in a write- up on the ACFTA: Challenges and Opportunities for the Manufacturing Sector.

African leaders approved that trading should start on January 1, next year as scheduled on the AfCFTA agreement and requested African financial institutions to provide technical and financial support for its implementation.

“The ratification of the CFTA in Zambia is also faced with a number of challenges such as inadequate technical expertise, high transport costs, inconsistent and incoherent trade policies and high cost of borrowing.

“In conclusion, it would be recommended that the ratification be halted until sufficient capacity is built to make local suppliers competitive,” Mr Dume said.

He however regretted that non-tradition exports in Zambia remained low, and that this could make it difficult for the country to reap the benefits from signing.

Mr Dume stressed that it was important to understand the challenges, hindering local exports in as much as the ACFTA seeks to resolve this challenge.

Zambia, he said, currently had limited technical know-how on technical regulations and procedures.

He said this hindered access to foreign markets, making it hard for the locals to overcome challenges such as non-tariff barriers.

“Secondly, the transport costs in Zambia are very high making the cost of doing business very high, as the importation of raw materials and exports makes it very expensive.

“Hence, this makes domestic products very uncompetitive against imports both in the domestic economy and in foreign markets,” Mr Dume said.