ZIMBABWE has failed to exploit massive export opportunities to European Union (EU) markets under a duty free window  that gives forex-strapped Harare access to a bloc that presides over a US$19 trillion gross domestic product (GDP).

It is a much biggest bloc by value, compared to the 55–member African Continental Free Trade Area’s US$3,4 trillion GDP. In emailed responses to the Zimbabwe Independent this week, Jobst von Kirchmann, EU’s ambassador to Zimbabwe, projected trade between Harare and Brussels to reach US$1 billion in a few years, from about US$750 million last year.

However, he said only 200 Zimbabwean firms were exploiting opportunities presented by a decade old pact called Economic Partnership Agreement (Epa).

His disclosures threw into question the efficiency of President Emmerson Mnangagwa’s engagement and re-engagement policy, which is meant to rebuild relations with a bloc that is already frustrated by slow pace of reforms.

Von Kirchmann said EU exports to Harare totalled US$340 million last year, with massive scope for accelerated trade.

“In 2023, trade between Zimbabwe and the EU stood at €658 million, with Zimbabwe exporting €346 million worth of goods to the EU and importing €312 million,” Von Kirchmann said.

“This resulted in a positive trade balance of €34 million in Zimbabwe’s favour.”

“We are optimistic that total trade between the EU and Zimbabwe will soon surpass US$1 billion annually, as both sides continue to explore mutually beneficial opportunities and deepen their economic ties.”

“Zimbabwe’s key exports to the EU include agricultural products such as sugar, blueberries, oranges, and mange-tout peas, as well as minerals.”

However, Kirchmann said only 200 Zimbabwean firms were registered to export to the EU.

“The Epa offers several avenues to enhance trade… The Epa, in place since 2012, provides Zimbabwe with duty-free and quota-free access to all 27 EU member states, significantly boosting its export potential. However, only about 200 Zimbabwean companies are currently registered to export to the EU, leaving considerable room for growth.”

Von Kirchmann said the bloc was playing an active role in helping Zimbabwe extinguish its US$21 billion debt.

With the Epa allowing Zimbabwe to export value added goods to the bloc duty free, the diplomat said, it was imperative for local companies to leverage on the platform.

“The Epa simplifies customs procedures, reduces barriers, and aligns standards, making it easier for Zimbabwean businesses to export to the EU. This also attracts European investors seeking better export routes.

“The Epa encourages Zimbabwe to move beyond raw material exports and focus on value-added products in agriculture and mining, which could attract more European investment in local industries.

“To deepen trade ties, it is crucial for Zimbabwean businesses to fully capitalise on the opportunities offered by the Epa and to address existing technical barriers to trade,” Von Kirchmann said.

 The EU has been  actively participat ing in Zimbabwe’s arrears clearance and debt resolution process.

The process, which is being steered by African Development Bank (AfDB) President Akinwumi Adesina, was introduced by Mnangagwa’s administration last year.

As a result of the debt overhang, Zimbabwe has not been able to secure financing from the likes of the International Monetary Fund for more than two decades, due to its arrears.

“The EU, as part of the broader international community, has taken a proactive role in supporting Zimbabwe through the government-led arrears clearance and debt resolution process,” Kirchmann said.

“The EU ambassador co-chairs the governance track of the Arrears Clearance and Debt Resolution process alongside Zimbabwe’s Ministry of Justice. This track focuses on promoting governance reforms, including transparency, accountability, anti-corruption measures, and respect for the rule of law.”

Zimbabwe’s debt obligations to the European Investment Bank stands at US$427 million and has attracted penalties over the years.

The diplomat added: “As for Zimbabwe’s financial obligations to the European Investment Bank (EIB), the country currently owes US$427 million, of which US$417 million consists of arrears and penalties.

“While there are no separate, bilateral discussions between the EIB and Zimbabwe regarding this debt, the EIB participates in broader creditor negotiations under the pari passu principle, meaning that creditors have agreed that an equivalent effort in arrears clearance will be adopted for all creditors.”

Countries from the Paris Club of creditor nations along with the World Bank, AfDB and EIB are some of the stakeholders participating in Zimbabwe’s debt clearance plan.

The US pulled out of the process last year following controversial elections which were discredited by various observer missions.