Zim trade volume with Africa bulking
ZIMBABWE is seeing more trade with African countries whom it had low or non-existent trade before the launch of the African Continental Free Trade Area (AfCFTA).
This comes as shipments between Zimbabwe and African countries that hitherto did not have any trade agreements with Harare having started picking up on account of improved access to previously protected markets such as East and West Africa.
South Africa is Zimbabwe’s biggest trading partner.
According to the Competition and Tariff Commission (CTC), trade with countries like Nigeria, Ghana, Morocco, and Mauritania is growing, which has been attributed to the AfCFTA.
The AfCFTA aims to provide broader and deeper economic integration across the continent as well as attract investment, boost trade, provide better jobs, reduce poverty and increase shared prosperity in Africa.
Although the continental free trade zone is still blighted by many issues, it has opened borders to a broader regional market.
Officially launched in 2021, the AfCFTA creates a single market projected to grow to 1,7 billion people and US$6,7 trillion in consumer and business spending by 2030.
“There are countries like Mauritania which we did not have any trade agreements with, but we are seeing a positive balance since the launch of the AfCFTA,” said CTC senior economist Ms Chinyaradzo Phiri at a Zimbabwe Revenue Authority (ZIMRA) Conference on AfCFTA.
“We are now exporting more to countries like Nigeria, (which) we did not have any trade contracts with but have now improved because of the AfCFTA,” she added.
Maize, wheat, crude oil and electrical energy are among the top 10 imports from the continent.
The AfCFTA is a trade agreement among 54 African countries that aims to create a single market for goods and services in Africa and seeks to boost intra-African trade by removing tariffs on 90 percent of goods traded within the continent.
This will create a larger market for African goods and services, expected to be a gamechanger for Africa’s economic development, with estimates suggesting that it could boost intra-African trade by up to 52 percent.
The AfCFTA entered into force on May 30, 2019. Under the protocol on trade in goods, member States have to negotiate market access offers.
These are tariff liberalisation schedules that member States have to come up with an offer to each other in a bid to eventually eliminate tariffs.
Last year, the AfCFTA launched the Guided Trade Initiative where eight countries (mainly West and East African countries) are currently participating under Phase 1 of the initiative.
Ms Phiri added that the AfCFTA had been instrumental in creating access to larger markets for Zimbabwean goods as well as cheaper sources of raw materials.
The bulk of the imports are raw materials, which reduces costs for the local industry.
“We can get raw materials, which our industries will beneficiate before selling to the export market and fetch more foreign currency,” she said, emphasising other benefits such as ease of doing business, greater business and trade opportunities as well as increased economic growth.
“Previously protected sectors will have their tariffs reduced, for example, textiles 40 percent . . . meaning goods that previously were not able to enter the domestic market can do so as long as they meet the Rules of Origin,” she informed.
The AfCFTA presently offers access to 1,3 billion potential customers.
Zimbabwe is reportedly preparing to resubmit its final tariff schedule for technical verification by AfCFTA, ahead of the trade block’s second phase of the GTI.
GTI piloted preferential trade among eight member States namely Cameroon, Egypt, Ghana, Kenya, Mauritius, Rwanda, Tanzania and Tunisia for 96 identified commodities.
The products included ceramic tiles, tea, coffee, processed meat products, corn starch and sugar.
Wamkele Mene, AfCFTA secretary-general, said 31 out of the 47 countries that ratified the agreement will join GTI in 2024.
Foreign Affairs and International Trade Deputy Minister Sheillah Chikomo expressed the country’s willingness to join the GTI during the Zimra-organised conference, adding that Zimbabwe already produces most of the products listed for the initiative.