Zim stands to gain the most with exports to AfCFTA partners
ZIMBABWE has been urged to simplify its tariff structure and implement reductions required within the African Continental Free Trade Area (AfCFTA) agreement, as it stands to gain in terms of exports to partners in the agreement.
AfCFTA is an ambitious undertaking that brings together 1,3 billion people in 55 African countries to create the world’s largest free trade area as measured by the number of participating member States. On final conclusion and implementation, its objective is the creation of an integrated market for the trade in goods and services and the free movement of people and capital.
In a presentation on trade opportunities and threats for Zimbabwe industry under AfCFTA at the Zimbabwe National Trade Tariff Conference in Bulawayo on Thursday, World Bank Country Economist for Zimbabwe and Eswatini, Dr Marko Kwaramba said the country stood to benefit the most in terms of exports to AfCFTA partners.
“The creation of the AfCFTA vast regional market is a major opportunity for Zimbabwe to diversify exports, grow faster and attract foreign direct investment (FDI). Zimbabwe’s exports of processed foods, agriculture, and manufacturing stand to gain the most in terms of exports to AfCFTA partners supporting the development of intra-regional value chains,” said Dr Kwaramba.
He, however, challenged Zimbabwe to simplify the tariff structure and implement reductions required within the AfCFTA agreement, while reduction of non-tariff measures (NTMs) and the implementation of trade facilitation measures would bring the biggest benefits to Zimbabwe. Dr Kwaramba said addressing macro-economic challenges was also a necessary condition for the country.
“There is a need to also look at macroeconomic challenges such as the official and parallel market exchange rate discrepancies. Also consider the annual inflation in terms of consumer price inflation of the year-on-year annual change on food inflation, non-food inflation and headline inflation.”
He said weak trade facilitation and border management was hindering Zimbabwe from becoming a major player in regional trade and gain from AfCFTA, hence the need to address these issues for the country to benefit from the agreement. Dr Kwaramba said though Zimbabwe’s export performance has improved over the last several premium was low.
He said the country had comparative advantage in four products such as vegetable foodstuffs and tobacco, minerals, textile clothing footwear and metals. In terms of resource mobilisation for private sector under the AfCFTA, Ministry of Finance and Economic Development principal economist, Mr Takesure Chigumira said there was a need to prioritise financing of value chains.
“The first critical guiding principle under the National Development Strategy 1 (NDS1) is the recognition that bold and transformative measures are required to underpin the drive towards the attainment of our Vision 2030.
“Slow transformation will not deliver Zimbabwe’s developmental agenda. For Zimbabwe to maximise the benefits from the AfCFTA, we need to leverage on our natural endowments, competitive (comparative) advantages, adopt bold and innovative strategies towards value addition and beneficiation,” said Mr Chigumira.
He said the AfCFTA provides an opportunity to establish or enhance local and regional value chains. Mr Chigumira said beyond negotiating the AfCFTA, Government continues to provide the necessary and conducive operating environment for business.
The Zimbabwe National Trade Tariff Conference which was a two-day event was hosted by the Competition Tariff Commission of Zimbabwe (CTC) running under the theme: Unpacking Zimbabwe’s Trade Agreements and Benefits that can Accrue to Local Industry.”
The conference’s objective was for industry to appreciate trade agreements and how they can benefit them. CTC Tariffs Division assistant director, Mr Isaac Tausha said the event was envisaged to assist local industry and commerce to tap into the ensuing opportunities, planning of future production and attendant future investment requirements.
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