ZIMBABWE is set to begin preferential trading under the African Continental Free Trade Agreement (AfCFTA), allowing local companies to export products duty free, or with reduced duties, it has been revealed.
Preferential trading under the AfCFTA allows African nations that have ratified these trading rules to grant each other reduced tariffs and trade barriers, allowing easier and more cost-effective trading of goods and services.
This system fosters regional economic integration by giving participating countries preferential access to each other’s markets, promoting intra-African trade, industrialisation and economic growth.
The AfCFTA aims to boost intra-African trade by eliminating tariffs on most goods, harmonising trade regulations and creating a unified continental market.
In January, South Africa announced the launch of preferential trade under the AfCFTA.
- ICGZ honours governance champions
- UNDP invests US$60m in solar, irrigation projects
- Microfinanciers approve more loans based on movable collateral
- Banking sector resilient, stable: Matshe
- CBZ shifts focus after CTC blocks FMHL further share purchases
“Zimbabwe is now close to commencing preferential trading under the AfCFTA following the technical verification of the country’s provisional schedules of tariff concessions by the AfCFTA,” Foreign Affairs and International Trade minister Frederick Shava said at the Zimbabwe Economics Society breakfast meeting held yesterday in partnership with Friedrich Ebert Stiftung.
“You heard the representative of the AfCFTA say that Zimbabwe is one of the countries that can now participate in this respect.
“This is one of the key prerequisites for a State party to commence preferential trading under the AfCFTA and we are pleased that Zimbabwe has pushed herself to that extent.”
Preferential trading also encourages multinational companies to invest and manufacture in countries that have signed on to it as there would be easier trading opportunities with member nations.
However, Southern and Eastern Africa Trade Information and Negotiations Institute Southern Africa co-ordinator Rangarirai Machemedze said Zimbabwe needed to increase its productive capacity to benefit from preferential trade.
“In the absence of goods to trade, we are likely to become a supermarket for other countries . . . We are the only people who can make the AfCFTA beneficial for our own country. Now, I have had the privilege of participating in one of the continental meetings where we were reviewing boosting intra-African trade,” he said.
“Those who know this programme know it’s a programme that has been designed to boost intra-African trade, especially by the production of goods and services that can be easily traded within our own country.”
He said while the six clusters of boosting intra-African trade included trade information, market access and infrastructure, Zimbabwe was lagging on the cluster on productive capacity.
“There is one cluster that has been lagging that is going to be fundamental for the success of the AfCFTA and that is the cluster of boosting productive capacities. Now, without goods to trade, the AfCFTA is going to be meaningless for Zimbabwe,” Machemedze said.
“And, I think you heard from the AfCFTA’s secretariat that the challenges that African countries face and Zimbabwe is part of that, is that we mostly export raw materials, which is a huge challenge for us because if we are all exporting raw materials, if we create this AfCFTA for ourselves, who is going to export to each other if we are producing more or less the same products?
“Which means we need to focus on how we can boost productive capacities of our industries.”
