Murwira pushes open-market agenda

LIVINGSTONE MARUFU

Professor Amon Murwira, Zimbabwe’s Minister of Foreign Affairs and International Trade, says the country must decisively open up its economy and embrace full trade liberalisation if it is to access larger markets and unlock long-term growth, even as economists warn that local industry may not yet be ready for the shock of open competition.

Zimbabwe is already deeply embedded in regional and continental trade arrangements. It is an active member of the Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA), and a signatory to the African Continental Free Trade Area (AfCFTA). Under the AfCFTA framework, Zimbabwe has committed to opening up 97% of its market to free trade.

While these commitments signal a strong policy direction, analysts say the country’s preparedness for full liberalisation remains uneven, constrained by structural weaknesses in manufacturing, productivity challenges and a fragile operating environment for local firms.

Professor Murwira said Zimbabwe could no longer afford to retreat behind protective barriers if it wants to compete meaningfully in global markets.

“I was telling the business executives yesterday that we are going to open up this door. Because we have given people the chance to import machinery. We can’t protect a mortar and pestle from making peanut butter when there is an automated robotic machine. We protect you so that you can use automated technology. That’s not going to happen. We are going to open this door so that you are able to prosper globally,” Professor Murwira said.

He said competitiveness required a fundamental shift in mindset among local businesses, arguing that access to export markets demanded reciprocity.

“You must not be just a local chief, but a global coach. If you want to export, you must allow other people to export to your country. If you want other people to open their markets, you open yours too. That is the attitude,” he said.

Zimbabwe Economics Society vice-president Misheck Ugaro said the country was already operating in a globalised economic environment and had limited room to delay trade opening.

“Since we are signatories to the AfCTA we have no choice and there is no time. We are required to open since we ratified,” Ugaro told Business Times.

Economist Vince Musewe said that, in practice, Zimbabwe’s economy was already liberalised, particularly in sectors dominated by foreign capital.

“The economy is already open especially to Chinese and various mining companies. Local companies must be innovative and compete but this requires a conducive economic environment and incentives for local companies,” Musewe said.

Government has in recent years signalled a strong commitment to creating an investment-friendly environment, rolling out measures to accelerate implementation of the World Trade Organization (WTO) Trade Facilitation Agreement. These include targeted liberalisation initiatives such as the operationalisation of a commodity exchange for strategic grains to promote transparent and efficient price discovery.

Zimbabwe also has a diversified economic structure, underpinned by rich mineral resources, agricultural capacity and access to regional supply chains. These factors, economists say, provide a potential base for export competitiveness in a more open market economy.

However, past experience continues to shape current caution. Rapid trade liberalisation under the Economic Structural Adjustment Programme (ESAP) in the 1990s was associated with severe short-term consequences, including output contraction, job losses, deindustrialisation in sectors such as textiles and iron and steel, a consumption boom and widening trade deficits.

Those outcomes have left some industry players wary of repeating history, particularly at a time when many local firms operate with limited capacity and high production costs. Concerns persist that cheaper imports could flood the market, undermining domestic production and employment.

Economists argue that this risk has strengthened calls for the protection of “sensitive products” and a more measured approach to opening up.

Studies have highlighted the need for government to undertake comparative advantage assessments and implement complementary policies to mitigate potential social and economic shocks arising from liberalisation.

There are also concerns around the alignment of national trade laws and tariff structures with regional frameworks such as the COMESA Common External Tariff (CET). Current national tariffs remain significantly higher in some areas, pointing to a complex and potentially disruptive transition.

While the economy is projected to grow, economists warn that persistent inflationary pressures and the need for a stable, predictable investment climate could undermine the ability of businesses to adapt to a more open trade regime.

Economist Malone Gwadu said Zimbabwe was not yet ready for full liberalisation and warned against exposing local firms to unfair competition.

“With the advent of globalisation this needs to be gradually attained but has to be done in a way that does not expose our industries to unfair competition. A certain element of protectionist measures ought to be maintained. Otherwise just outrightly opening the economy without increasing our global competitiveness will cause massive economics costs such as foreign currency mopping, dumping of goods and out competence of local industries by global players leading to increased job losses and taxes to mention but a few,” Gwadu said.

Another economist, Titus Mukove, said several sectors needed protection before broader liberalisation could be pursued.

“There are certain sectors that we need to protect for the local entrepreneurs and businesses and there are certain sectors that we can actually liberate in order to increase operations in those sectors. So we had a Statutory Instrument 215 of 2025 which actually articulates the fact that there are certain sectors that need to be reserved for the local people and I think that is the right direction because we may not be able to compete with multinational companies which have got advantages of huge capital base and they enjoy economies of scale,” Mukove said.

He said Zimbabwe had many start-ups and sunrise industries that required protection to allow them to grow.

“Those multinational companies grew over time and they have got huge capital bases and that did not happen overnight. It was because they were protected there in their motherland, in their mother countries. So we also need to do the same if you are to experience inclusive growth as an economy,” Mukove said.

“So a full exposure of our economy will not be right for those businesses that are still growing in Zimbabwe. That needs to be protected. And I still feel that we should reserve certain sectors for the local people in order for us to capacitate our own entrepreneurs, give them a chance to grow so that they also become competitive at international level.”

Mukove said liberalisation should also act as a wake-up call for local firms to innovate, adopt modern technology and drive down production costs in order to compete internationally.

He argued for selective rather than blanket liberalisation, suggesting sectors such as retail and wholesale could be opened up first.

“Some sectors need to be protected, you know, to safeguard the legacy that we have for our economy. And what we need to do is to make sure that there is sustainability, give chances to the local businesses to grow,” he said.

Drawing on global examples, Mukove said even advanced economies continued to protect strategic industries.

“We’ve seen the Americans under the current regime of Donald Trump coming up with huge import tariffs from countries in order for them to protect their own industry. And why should we liberalise when big economies are actually coming up with policies to protect their own industries?” he said.

“In the UK alone, most sectors, foreign ownership should not exceed 15%. So it means they are protecting their own entrepreneurs, their own businesses, their own economy. So we cannot be an economy that has no protection for its local industry. We need that kind of protection.”