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Zimbabwe ready to ride on AfCFTA opportunities

10 Oct 2019 at 06:49hrs | Views
Foreign Affairs ministry secretary James Manzou has told Parliament that Zimbabwe is geared to take advantage of the opportunities to be brought about by the African Continental Free Trade Area (AfCFTA) which will came into effect in July next year.

Manzou told MPs from the Foreign Affairs Portfolio Committee during his appearance in Parliament on Tuesday that Zimbabwe was now working on its export competitiveness to benefit from AFCFTA â€" a treaty brokered by the African Union in Kigali, Rwanda in 2018 which will promote African trade through removal of tariffs from 90% of goods by member States, thereby allowing for free access to commodities, goods and services.

"It is our hope that as we re-introduced our currency, our products are competitive and we will take advantage of the African Continental Free Trade Area (AfCFTA) â€" a treaty which we have already signed," he said.

But Zimbabwe National Chamber of Commerce (ZNCC) chief executive Christopher Mugaga, who also appeared before the Budget and Finance Parliamentary Portfolio Committee, said without proper infrastructure, Zimbabwe would lag behind in terms of taking advantage of AfCFTA.

"AfCFTA is coming â€" around July, and we will be competing with countries that have infrastructure which is functional. As long as we do not sort out our infrastructure we will be disadvantaging ourselves," Mugaga said.

In an interview with NewsDay Business recently African Union chief technical advisor in the department of Trade and Industry, Rongai Chizema said Zimbabwe stands to benefit immensely if it implements AfCFTA.

"For instance, the country has been isolated from global economics due to incapacity to access cheaper lines of production to shore up industrial output. Its industrial production capacity is at its lowest ebb in the country's economic history.

"In a nutshell, Zimbabwe is on standstill and has also lost its Sadc and regional trade footing over the years. With AfCFTA opening access to a liberal trading regime of more than US$3 trillion, and a customer base of US$1,27 billion, characterised by a growing middle-class, Zimbabwe can turn the corner if it can position itself for the grant free trading zone that roars into life on July 1, 2020," Chizema said.

The AU trade and industry expert also said the most beckoning benefit for Zimbabwe would be that, doing trade on the AfCFTA programme will de-risk Zimbabwe from the current weak political and sovereign risk profile that has shocked it since 2000, thus opening windows for the country to access capital.

"However, we can only take advantage of it if we are organised and our industry can produce competitively. Our financial systems should be very flexible to allow for a new architecture of non-traditional banking products to take more risk to support emerging business initiatives as well as help small-and-medium enterprises (SMEs) to integrate into the domestic, regional and continental value chains and business ecosystems," Chizema said.

Source - newsday
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