Zimbabwe is set to access 5,900 free tariff lines through the Africa Continental Free Trade Area (AfCFTA). This opportunity will allow Zimbabwe to tap into the continent’s $3.3 trillion economy.
A study by the Confederation of Zimbabwe Industries in April found that only 34% of local industries are ready to compete in the AfCFTA. Regulatory costs and taxes are significant barriers for many businesses.
During the CEO Africa Roundtable Annual Conference in Victoria Falls, Industry and Commerce Minister Mangaliso Nqobizitha Ndlovu highlighted the potential benefits of Zimbabwe’s participation in the AfCFTA. He noted, “Out of 9,000 tariff lines, 5,900 will be tariff-free in the first five years, 500 will take 10 years to liberalize, and 3% will remain protected.”
The AfCFTA offers Zimbabwe a chance to explore a vast market with 1.3 billion people. However, Ndlovu acknowledged the challenges posed by Zimbabwe’s dollarized economy and structural issues. He emphasized the need for the private sector to boost productivity to compete with cheaper imports.
“The private sector must step up and improve productivity. According to the World Bank, only a few countries will benefit the most from AfCFTA. I hope Zimbabwe is one of them,” Ndlovu said.
The AfCFTA aims to remove tariffs in phases: 90% in the first five years, 7% in the next ten years, and the remaining few sensitive products will stay protected. Ndlovu stated, “We still have a lot of work to do to make AfCFTA a success. We need to focus on regional trade first and then expand.”
Ndlovu also expressed concerns about the logistics of trading with countries like Algeria. He noted that the implementation of a building-block approach to improve trade within the region has been slow. This approach involves first building elements leading up to a free-trade agreement, such as trade facilitation activities, with more challenging economic provisions coming later.
“I hope to see a study that analyzes trade barriers before and after the colonization of Africa. Many countries have become more protective, except for the relatively industrialized ones. We are fortunate to have a relatively industrialized neighbor, but many countries have become more protective,” Ndlovu said.
He added, “The political will is there, with almost 90% of countries on board. However, practical challenges arise when considering job losses and market dynamics. The idea of AfCFTA was conceived to promote national economies. We need to strike a balance on that understanding.”
Zimbabwe has signed several memoranda of understanding with local and international bureaus of standards. This move aims to synchronize and facilitate trade under the AfCFTA. “We have identified areas for improvement, including financial participation. Synchronizing standards across countries will help prevent substandard products from entering our markets,” Ndlovu added.
Source: Newsday
