Zim industry readies for AfCFTA’s US$3,4 trillion market

INDUSTRY is preparing a Zimbabwean strategy in order to identify and exploit opportunities presented by the African Continental Free Trade Area (AfCFTA), which came into force in January, focussing on building enterprise and sector wide value chain competitiveness.

National trade promotion body, Zimtrade, says domestic industry should also focus on producing high quality goods and developing strong competitiveness to withstand the cutthroat competition in the more open market.

ZimTrade, however, noted that in order to achieve this, there must be investment into productive capacity, which is centred on improving value rather than output volume.

AfCFTA is the African continent’s most ambitious integration initiative, embedded in the Agenda 2063 of the African Union, whose main objective is to create a single continental market for goods and services with free movement of people and investments.

The AfCFTA is expected to increase intra-Africa trade from an existing level of about 13 to 25 percent or more through better harmonisation and coordination of trade liberalisation.

The signing of the deal at continental level, has created a market of about 1,3 billion people with an estimated combined gross domestic product (GDP) of over US$3,4 trillion.

So far, 54 out of 55 African countries, Zimbabwe included, have signed the trade pact to allow duty free access of goods and services on the continent.

For Zimbabwe, scaling up production and enhancing competitiveness, investing in quality and standards, technology and submission of tariff offers in line with national interest, remain some of the key outstanding points.

Industry and Commerce Minister Sekai Nzenza, recently said the private sector should take advantage of the massive opportunities availed by the AfCFTA and ensure that the country produces more, employ and contribute to overall economic growth.

She urged domestic industry to actively provide input when the Government rolls out the consultative processes of national tariff offers.

Confederation of Zimbabwe Industries (CZI) chief executive, Sekai Kuvarika, said the AfCFTA was a welcome development and Zimbabwe was in preparation mode to deepen its value chains through the local content policy.

She made the comments during her remarks at a virtual seminar to discuss the implications of and opportunities for Zimbabwe industry and economy from the AfCFTA.

“So, industry is in preparation mode as we speak, recognising opportunities that are there and this preparation mode is characterised by the deepening of local value chains through the local content policy with value chain approach to industrialisation,” Mrs Kuvarika said on Tuesday.

“We are also looking at the SADC industrialisation agenda and regional value chains, as we progress our participation in the regional value chain, we begin to plug into the continental market as well.

“We are reorganising ourselves, recognising the need to syndicate, I would say, and to internationalise our businesses on the continent, looking also at regional and continental partnerships that can drive business on the continent.

“If you look at our businesses, I think for a long time, we had quite an inward approach in terms of the development of the enterprises, but with the coming of the CFTA, we are looking at “How do we reorganise industry and business for cooperation and competition in the external markets,” she said.

The CZI CEO said it was strategically important to have a very strong and cohesive business community in order to tackle the regional and continental market.

“Our strategy is really premised on building a competitive private sector. What I mean about a competitive private sector, we are talking about competitiveness and in the policy and regulatory business environment, yes, that needs to be achieved.

“But we are also talking about competitiveness at enterprise level as well as at value chain level so that we can regain production hub status as the most efficient and most competitive production place on the continent, having identified which goods we are best placed to leapfrog on in that direction.

“So competitiveness is at the core of our strategy as we are looking at continental market.

“Are we ready? Yes, we are, because we are preparing to tackle the continental market. Are we capable and do we have the capacity?

“I think the long history of Zimbabwe’s industrialisation is testimony to the knowledge that is resident in the economy,” she said.

Zimtrade chief executive, Allan Majuru, said when national borders reopen, “we are going to get new markets and where there are new markets, we are going to get competition”.

“So, people are going to go for the competitiveness that we have so we need to also look at that. I appreciate that there are a lot of efforts that are being done by the Government to make sure that the ease of business is improved.

“If you look at the import bill of Africa it is around 570 billion. I took time to look at the top 20 imports there; it is interesting to notice that on number 5 there was cereals and I am sure as Africa, we have sufficient land to produce and feed ourselves.

“If you look at that bill, a chunk of it is not coming from Africa but other continents, but what also interested me is that on number 19 was furniture; massive opportunity! We have plantations here in Zimbabwe, we have an opportunity that arises,” he said.-chronicle.cl.zw