Zimbabwe is seeking a 15-year waiver to tackle domestic headwinds for its 90% tariff offer under the African Continental Free Trade Area (AfCFTA) amid calls by experts for local firms to take advantage of the single market.
The economy is buffeted by power and foreign currency shortages and antiquated machinery which has increased the cost of doing business in Zimbabwe.
The agreement establishing the AfCFTA entered into force on May 30 with countries expected to remove tariffs starting immediately by 90%.
James Manzou, Foreign Affairs and International Trade permanent secretary, told a sensitisation workshop this week that Zimbabwe should take advantage of the free trade area as it embarks on an industrialisation strategy for more diversification in production of manufactured goods with a bigger market for goods and services.
But he said Zimbabwe was negotiating a longer period to open up. “…Zimbabwe is negotiating for longer liberalisation period of 15 years for our 90% tariff offer under the AfCFTA by which we envisage better performance from industry and an improvement on our macroeconomic environment,” Manzou said.
He revealed that negotiations on trade in goods and services under the AfCFTA had been guided by what was obtaining in the regional blocs, such as SADC and COMESA where Zimbabwe is currently implementing 84% liberalisation under SADC as it has not yet fully eliminated tariffs on what “we have offered as our sensitive basket”.
Batanai Chikwena, programme management officer at the UN Economic Commission for Africa, said Zimbabwe had to deploy deliberate strategies to ensure that the private sector, as a key stakeholder in production and trade, was strategically positioned to exploit larger market opportunities offered by the AfCFTA, with reduced tariff and nontariff barriers.
“It is imperative to address supplyside constraints limiting the productive capacity of industry to stimulate competitiveness and growth. Ensuring coherence among fiscal, monetary policy, national industrial policies, and trade promotion initiatives is critical,” Chikwena said.
According to him, the government working with the private sector “can leverage the AfCFTA for Zimbabwe’s reindustrialisation and economic diversification as well as promoting the manufacturing sector and stimulating agricultural production”.
According to studies, the free trade area will result in the manufacturing sector doubling in size with annual output rising to $1 trillion in 2025 from $500bn in 2015.
This will contribute additional 14 million stable jobs. Beatrice Chaytor, a trade expert at the African Union Commission, said Zimbabwe needed to come up with a national AfCFTA strategy to provide pointers for the way in which the public and private sectors could make use of the continental bloc for the benefit of businesses and citizens.