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Will Zimbabwe recover and benefit from the AfCFTA?

22 Jul 2021 at 08:37hrs | Views
African Continental Free Trade Area (AfCFTA) came at the time when Zimbabwe is at the verge, struggling economically as seen with poverty elongated with COVID-19 dominating the society. AfCFTA is a project of African Union aiming at creating a single market for goods and services. Majority of states are signatory to this pact, which will promote intra trade which has been highly dominated by and in meticulous of the Chinese and the West causing trade dependency.

Paying attention to the ethos of the United Africa, AfCFTA is seen as a noble move towards the realization of Pan-Africanist objectives. This is because AfCFTA is set to boost production, amplify competition, eradicate trade tariffs, as well as to augment industrialization within African states, among others.

AfCFTA is set to boost Foreign Investment, Zimbabwe must then alter its policies to align them with other nations. Failures of Zimbabwe is open for business mantra to attract FDI will initially shape how we will benefit from the agreement. Policy makers must enforce the easy of doing business so as to market Zimbabwe and put it at par with other nations which in turn improve cooperation.

Zimbabwe must endorse multilateralism and maximize the opportunity to benefit from its fellow African states. This is because of the sour relationship with the West and deteriorating Look East policy. The lessons of unilateralism can be drawn from the effects of sanctions and ever ending economic crises since after the withdrawal from the Commonwealth. Not only Zimbabwe but most African states must liaise to save themselves from the Chinese threshold which is viewed as a modernized annexation of Africa.

AfCFTA is meant to create a single market for goods and services to expand trading within African nations. The question is what will Zimbabwe offer to trade on this colossal market size? Zimbabwe has been the biggest importer for the past decades. As the formally known bread basket of Africa (southern) it's high time for farmers to produce excess to trade with other nations. All sectors must be goal oriented for Zimbabwe to claim its status, thus there is need to promote production of all that can be exported so as to recover and maintain trade balance. To trade and export successfully manufacturers must be aware of foreign competition, emphasis must be on quality and expense to meet an optimum standard to avoid losing market to foreigners.

Furthermore the agreement will boost industrialization which will result in competitive manufacturing. Zimbabwean products are quite expensive as compared to those of other states. It must improve the industries to boost production at lower cost to meet the economical standard. In the past we have been exporting raw materials to South Africa mainly, but with the progress of AfCFTA there is need to set up industries and improve exportation of finished products. If a nation is more industrialized there is cheap production of goods and the value added advantage will be of beneficial to the locals.

Adding on the government of Zimbabwe have a number of tariffs which control and to some extent hinder trade. These tariffs were meant to enhance domestic trade and it was a source of revenue to the government. With AfCFTA taking effect there is need to improvise on preferential tariffs and create an auspicious and viable environment to trade. As a result trade will follow proper-formal channels unlike in the ‘past' were cross border traders use undesignated conduits to deviate from the cost tariffs.

Apart from eliminating trade barriers the agreement will open up operations for small and medium businesses. The economy of Zimbabwe after the indigenization policy is sustained with small and medium enterprises (SMEs). There is need to grab this chance and promote SMEs to produce regionally competitive products to trade beyond borders. This will effect economy growth, as small and medium businesses accumulate to about 80% of the region enterprises.
Due to crumbling economy Zimbabwe must be at the forefront of the AfCFTA initiative as the nation need it most to recover. Policies must be revised and walk the talk. The agreement if used wisely, it will address the issue of unemployment. Youths must be encouraged to be innovative and participate as the agreement is the future of Africa which lies in youths hands. Awareness should be done to all the citizens so as to diversify our trade proficiency. This will stimulate trade as Zimbabwe is employed with informal traders.

There is hope in AfCFTA, it ensures that Africa unite towards development and break the yoke of poverty. It is also in line with agenda 2030 of the UN and its SDGs for instance goal 8, which entails for economic growth. Irrespective of our metamorphoses and mutual aim, there is need to homogenize heterogeneous economies to cooperate peacefully with adherence to WTO principles of sanitary and phyto-sanitary as well as anti-dumping. Together as one Africa, we can flourish.

Fifteen Theophelous is a University of Zimbabwe student currently studying MSc in International Trade and Diplomacy

Source - Fifteen Theophelous
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