Zim behind on AfCFTA tariff offers

ZIMBABWE is lagging behind on the requirement to submit schedules on tariff concessions and commitments on trade and services in order to fully participate in the African Continental Free Trade Area (AfCFTA); the new 1,3 billion people market, official reports reveal.

A free trade area is a group of countries that have few or no barriers to trade in the form of tariffs or quotas among them.

Rules of origin are the criteria needed to determine the national source of a product. They are important in implementing such trade policy instruments as anti-dumping and countervailing duties, preferential treatment, origin marking, and other safeguards.

Industry and Commerce Minister Sekai Nzenza, recently implored the domestic industry players to actively provide input when the Government rolls out the consultative processes on national tariff offers.

AfCFTA is the African continent’s most ambitious integration initiative, embedded in the Agenda 2063 of the African Union, whose main objective is to create a single continental market for goods and services with free movement of people and investments.

The free trade area is expected to increase intra-Africa trade from existing levels of about 13 to 25 percent or more through better harmonisation and co-ordination of trade liberalisation.

Signing of the deal at continental level has created a market of about 1,3 billion people with an estimated combined Gross Domestic Product (GDP) of over US$3,4 trillion.

So far, 54 out of 55 African countries, Zimbabwe included, have signed the trade agreement to allow for duty free access of goods and services on the continent.

It has since emerged that the majority of members states that have signed to the dictates of the continental free trade area have already lodged indicative papers on how they wish their products treated.

Official reports indicate that 41 countries, out of 54 that signed and ratified the AfCFTA, have already submitted schedules of tariff concessions while 34 states have handed in schedules on tariff commitments.

The African Development Bank (AfDB) estimates that the AfCFTA, which came into force in January this year, will boost regional incomes by more than 70 percent and lift over 30 million Africans from extreme poverty.

Peter Joy Sewornoo, a senior advisor at the AfCFTA, told a virtual seminar on the impending liberalised African market, that Zimbabwe seemed to be lagging behind its continental peers in terms of getting itself ready.

“As we speak right now, the secretariat is in receipt of 41 tariff concessions from member states; . . . in terms of schedules of specific commitments on trade and services, what we currently have is receipt of 34 schedules of specific commitments.

“I was just looking through the list from the summit that was held in December, 2020, which is the 13th Extraordinary Summit, and out of that; 41 for the tariff concessions and 34 for the specific commitments, I did not see Zimbabwe,” Sewornoo said.

Experts said while the AfCFTA would mean a much larger export market for Zimbabwe and lower prices on some goods and services for local consumers, a lot depends on what the country will put in the basket of tariff concessions and commitments on trade and services.

There is a total of about 6 380 tariff lines, 7 percent of that being sensitive products and 3 percent entails excluded items.

The balance of 90 percent is constituted by non-sensitive and or non-excluded products, which members can choose to freely trade in within the AfCFTA.

“Business in Zimbabwe need to be aware which products you are putting in, for instance into the exclusions basket for which there will be no (tariff) cuts in terms of liberalisation.

“Businesses in Zimbabwe would also want to know, for the sensitive products, which will have a longer transitional period, there are 47 tariff lines; what are those products?” he asked.

Sewornoo said coming up with schedules on concessions and commitments would give local traders clear picture of applicable tariffs and direction on areas that will remain closed or be open to external players.