Make high-value goods to beat AfCFTA competition: Nzenza
INDUSTRY and Commerce Minister, Dr Sekai Nzenza has implored local industry players to produce high-value products to be competitive when trading within the African Continental Free Trade Area (AfCFTA) bloc.
The African trading bloc, launched in January 2021, AfCFTA is the largest free trade area in the world in terms of the number of participating countries, covering a market of 1, 2 billion people and a combined Gross Domestic Product (GDP) of over US$3 trillion.
This agreement aims to create a single market for goods and services in Africa by removing tariffs and other trade barriers between African countries.
It is expected to boost intra-African trade, promote economic integration and industrialisation, create jobs, and increase the continent’s bargaining power on the global stage.
Like a significant number of other African countries, Zimbabwe exports low-value raw and semi-finished commodities, which are then imported back into the country as finished goods at a much higher price which is less beneficial to the local economy.
However local industry has lately been bent on increasing the sophistication of products made in the country and these will have more value, driving the economy up the value chain and creating higher-value jobs in the process.
Currently, Zimbabwe merchandise exports are largely agricultural products, encompassing tobacco, macadamia nuts, citrus and hides as well as gold, Platinum Group Metals, chrome, diamond and nickel, manufactured products like sugar, cigarettes, wood and timber, metal products and electrical goods.
These represent a low percentage contribution as far as export earnings potential from manufactured goods is concerned.
However, the Government’s economic blueprint, National Development Strategy 1 (NDS1 2020-202), strives for enhanced competitiveness through improved value addition, better contribution of manufacturing to GDP, and increased contribution of value-added exports to total exports, particularly from beneficiated minerals.
“In order to trade competitively we must produce not only produce using the traditional methods but produce innovatively paying attention to creating high value products,” said Minister Nzenza the at the Connect Africa Symposium held during the Zimbabwe International Trade Fair in Bulawayo last week.
National Competitiveness Commission (NCC) chairperson Charles Msipa recently indicated that Zimbabwe needs to work on systems that bolster local industry’s export competitiveness in the face of the AfCFTA which requires efficiency to match regional counterparts.
“Zimbabwe signed the AfCFTA, which is a milestone towards trade liberalisation and as a nation we need to keep abreast with these new developments by enhancing our competitiveness and our business environment to ensure the success of our businesses,” he said.
The AfCFTA provides opportunities for African countries to increase their trade in highvalue produce, countries, such as Ghana, Nigeria, and Tanzania, are already increasing their production and exports of high-value crops.
Kenya is a leading exporter of flowers, while Ethiopia is a major producer of coffee and other horticultural products.
The agreement provides for the gradual elimination of tariffs on 90 percent of goods traded between African countries and the creation of a dispute resolution mechanism to resolve trade disputes.
With the removal of tariffs and other trade barriers, African countries can expand their markets and boost their exports of these products to other African countries.
The successful trade of high-value produce under the AfCFTA will require investment in infrastructure, such as roads, ports, and cold storage facilities, as well as the development of quality and safety standards and certification procedures.