ZIMTRADE, the country’s export promotion body, has urged local exporters to take advantage of the African Continental Free Trade Area (AfCFTA) agreement and start preparing to access markets that will be available through it.
BY MTHANDAZO NYONI
To date, 27 countries, including Zimbabwe, have ratified AfCFTA meant to create strong economic integration on the continent by forming a single continental market.
It is also one of the largest free trade areas since the formation of the World Trade Organisation, given Africa’s current population of 1,2 billion people, which is expected to grow to 2,5 billion by 2050.
The AfCFTA agreement also has the potential to foster industrialisation and deepen regional value chains.
“Local companies will get an opportunity to add valuable inputs to their production chains by acquiring unique services from other African supplies and service providers from other African countries at a relatively low cost.
This will create an opportunity for industrial growth and result in world class competitive products participating in the global market,” ZimTrade said.
“Zimbabwean exporters can benefit from wide markets and consumer base from the continent resulting in welfare gains of billions of United States dollars.”
Other benefits include elimination of tariffs in the continental free trade area, meaning that companies will now be able to export many products and be more competitive with the equal pricing of all products in foreign African markets.
The agreement will also remove tariffs that were causing prices of exported products to increase, resulting in products becoming less desirable in other markets.
“This agreement will push for industrial development and improve Zimbabwe’s production capacity. Local exporters are encouraged to take advantage of this opportunity and prepare to access markets that will be available through the AfCFTA agreement,” the body said.
Trudi Hartzenberg, executive director for Stellenbosch’s Trade Law Centre, says a 2013 Trade Law Centre study showed that reducing the time taken to move goods across borders by just 20% would boost Africa’s economies more than removing all import tariffs.
Zimbabwe recently launched a Zimbabwe National Industrial Development Policy (2019-2023), which, among other things, looks to the export sector as a key growth area towards economic revival, a development welcomed in light of the AfCFTA agreement, ZimTrade says.