ZIMBABWE will access 5 900 free tariff lines if efforts to make use of the Africa Continental Free Trade Area (AfCFTA) yield results, accessing the continent’s US$3,3 trillion economy, it has been revealed.
In April, a study conducted by the Confederation of Zimbabwe Industries found that only 34% of the local industries was ready to compete in the AfCFTA as most are hindered by regulatory costs and taxes.
During a panel discussion at the ongoing 10th edition of the CEO Africa Roundtable Annual Conference in Victoria Falls, Industry and Commerce minister Mangaliso Nqobizitha Ndlovu revealed the potential benefit from Zimbabwe’s participation in the AfCFTA.
“I am happy to discuss the African Continental Free Trade Area (AfCFTA) and its implications for Zimbabwe. Out of the 9 000 tariff lines, 5 900 will be tariff free in the first five years, 500 will take 10 years to liberalise and 3% will remain protected,” he said, in response to questions.
“This presents an opportunity for Zimbabwe to explore the African market, with 1,3 billion people and a US$3,3 trillion economy.”
However, the minister said as a dollarised economy with structural issues, there was a need to address competitiveness and job losses.
“The private sector must step up and improve productivity to compete with cheaper imports. According to a study by the World Bank, a few countries will benefit the most from AfCFTA and I hope Zimbabwe is one of them,” Ndlovu said.
Regarding tariffs, he said the AfCFTA objective was to remove them in phases — 90% in the first five years and 7% in the next 10 years, while the remainder would be the few sensitive products to remain protected.
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“We still have a lot of work to do to make AfCFTA a success. In my previous role, we advocated for a ‘building-block approach’, starting with regional trade and gradually expanding,” Ndlovu said.
“I am not sure if we have made progress at the regional level. The logistics of trading with countries like Algeria and some other countries are still unclear to me.”
He noted that there had been slow implementation of the building block approach to improve trade gradually within the region.
The building-block approach entails first building elements leading up to a free-trade agreement, such as trade facilitation activities with more difficult economic provisions coming later.
The approach also entails creating elements that facilitates a multilateral trading system such as putting supportive policies and legislation towards a free-trade agreement.
“I hope to see a study that analyses trade barriers before and after the colonisation of the African continent. You will see countries becoming more protective, except for the fairly industrialised ones. We are fortunate to have a relatively industrialised neighbour, but many countries have become more protective,” Ndlovu said.
“The political will is there, with almost 90% of countries on board. However, practical challenges arise when considering job losses and market dynamics when the market is liberalised are slowing down the process. The idea of AfCFTA was conceived to promote national economies, not one over the other. We need to strike a balance on that understanding as Africa.”
It was revealed that the country had signed a number of memoranda of understanding with the local bureau of standards and the Development Bureau of Standards of other countries.
This was meant to synchronise and facilitate trade under the AfCFTA.
“We have identified areas for improvement, including financial participation. Synchronising standards across countries will help to prevent substandard products from entering our markets,” Ndlovu added.
