AfCFTA roars into life…Zimbabwe angles for big share
AFRICAN states on Friday commenced official trading under the African Continental Free Trade Area (AfCFTA) seen as a historic stride towards continental economic integration.
Operationalisation of the AfCFTA was initially scheduled for July 2020 but had to be delayed following the outbreak of the deadly Covid-19 pandemic, which hindered timely finalisation of negotiations.
Zimbabwe is already a signatory to the agreement and expects to benefit more after it deposited its instrument of ratification, paving way for the country’s full participation in the estimated US$3,4 trillion bloc and continent-wide market of about 1,3 billion people.
Earlier expert projections have tipped Zimbabwe to be among the top beneficiaries of the expanded regional market.
Increasing exports ties closely with the broad objectives of the recently launched National Development Strategy (NDS 1:2021-2025), which seeks to, among others, “rebalance the economy through increasing the contribution of value-added exports to total exports from nine percent in 2020 to 20 percent in 2025”.
The revival of Zimbabwe’s economy will require increased exports, especially of value-added goods and services.
The projected impact on the AfCFTA on the national economy cannot therefore be overemphasised, said ZimTrade, the country’s trade development and promotion agency.
It noted the AfCFTA is a significant milestone towards improving Zimbabwe’s exports into the rest of the continent.
“Undoubtedly, the easing of trade restrictions in Africa, which will make it easy for local companies to export, will contribute to the achievement of Vision 2030 and national economic targets,” said ZimTrade.
Neighbouring South African goods reportedly started flowing out on Friday under the Africa-wide free-trade pact.
“AfCFTA presents South African producers and manufacturers with an opportunity for expansion to new markets in West, Central, East and North Africa,” Minister of Trade, Industry and Competition, Ebrahim Patel, told Bloomberg.
Trade economists project the deal will significantly boost intra-Africa trading and vigorously activate local value chains while opening wider employment opportunities. The World Bank estimates the AfCFTA deal could lift tens of millions out of poverty by 2035.
Studies have also shown that the percentage of intra-Africa trade remains lower at about 16-18 percent.
While the bulk of the continent’s trade is with the rest of the world, most African exports are in raw materials including extractive commodities like oil, gas and minerals, which are vulnerable to market volatility.
The President of Ghana, Nana Akufo-Addo, whose country hosts the AfCFTA Secretariat said during an online launch ceremony on Friday that:
“There is a new Africa emerging with a sense of urgency and purpose and an aspiration to become self-reliant.”
Wamkele Mene, the secretary-general of the AfCFTA Secretariat has said that the Covid-19 lockdown experience has given added impetus to the process.
“Covid-19 has demonstrated that Africa is overly reliant on the export of primary commodities, overly reliant on global supply chains,” he said.
“When the global supply chains are disrupted, we know that Africa suffers.”
Experts have, however, urged regional leaders to attend to the existing obstacles, which range from pervasive red tape and infrastructure gap to the entrenched elements of protectionism in some member states. These have to be swiftly overcome if the bloc is to reach its full potential.
Responding to this, the Reuters quoted Silver Ojakol, chief of staff at the AfCFTA Secretariat saying: “economic integration is not an event. It’s a process…we must start somewhere.”
The AfCFTA Secretariat has said it will be rolling out a series of events that will take place virtually and physically to celebrate the operationalisation of AfCFTA, which fulfils the then Organisation for African Unity (OAU) founding fathers’ dream of a truly united and integrated continent.
“Under AfCFTA trading, tariffs on various commodities where rules of origin have been agreed, will be drastically reduced and traders of all sizes will have access to a much bigger market than they used to before,” said the AU.
“Non-tariff barriers (NTBs) to trade will also be addressed and a mechanism for speedy reporting and resolution of NTBs has been put in place.
“The bigger market will spur producers to upscale and so support increased industrialisation and value addition on the continent. More employment opportunities will thus be generated for Africa’s burgeoning youth population.”
The AU also expects the AfCFTA to help mitigate the impact of Covid-19 through enhancing medicines and personal protective equipment production and distribution within the continent.
“The AfCFTA will be a tool for mitigation of Covid-19 by allowing free and unhindered trade in health products across the continent,” it said.
The agreement establishing the AfCFTA was signed in March 2018 in Kigali, Rwanda following conclusion of the main legal texts. A total of 54 member states of the African Union have signed while 30 countries have deposited their instruments of ratification with the chairperson of the AU Commission.
The main objectives of the AfCFTA are to create a single market for goods and services, facilitate the movement of persons, promote industrial development, sustainable and inclusive socio-economic growth.
The deal is also set to help resolve the issue of multiple membership, in accordance with agenda 2063, laying a solid foundation for the establishment, in future, of a continental common market.-chornicle.co.zw
