‘Diversification, value addition our gold in AfCFTA’

Diversification and value addition are the main areas of focus for Zimbabwe as it looks at tapping into the African Continental Free Trade Area (AfCFTA), whose market boasts of more than 1,3 billion people.

Trade experts and development banks from the AfCFTA region this week held discussions in Harare on the implementation of the regional market concept, which was launched a few years ago.

The need to diversify the export basket and value addition of local products dominated the discussions, as Zimbabwe seeks to increase its trade share in the US$3,4 trillion market.

Trade Facilitation Consultant, Joseph Musariri noted; ‘‘Absolutely there are some limitations being faced by the industry in accessing the market with the key question being centred on what needs to be done. The answer is simple and it is all about the value addition of the exports.’’

Supported by the National Development Strategy One, the manufacturing sector has started to retrace its industrial footprint through the Industry and Commerce Transformative Agenda anchored on domestication of value chains.

Over the past four years, the country’s industrial structural transformation has been underpinned on value chain enhancement particularly fertiliser, food and beverages.

It also includes soya, cotton, leather, dairy, sugar, engineering iron and steel as well as pharmaceuticals.

Permanent Secretary in the Ministry of Industry and Commerce, Dr Mavis Sibanda, says the manufacturing sector is now contributing a massive 18,4 percent to the GDP, with capacity utilisation now above 70 percent.

“As Industry and Commerce, we are very happy with the way the country’s industrialisation is going on and significant progress has been registered through Industrial Development Corporation of Zimbabwe as we now have our own tick grease to protect our livestock, water treating chemicals from Chemplex, which we used to import as well as grain protectant chemicals to enhance food security,” she said.

Confederation of Zimbabwe Industries chief economist, Cornelius Dube said; ‘‘The commitment to export and import in the region is there but of concern is the limitations on awareness to such an extent that government and the private sector should improve awareness campaigns that enable industry and commerce to fully understand the market and its implications on the economy.’’

To authorities, Zimbabwe stands to benefit from the AfCFTA once fully operational.

Co-ordinator African Trade Policy Centre Regional Integration and Trade Division Melaku Geboye Desta noted; ‘‘The focus is on how to increase trade, what can be done to enhance trade, removal of barriers to trade, harmonisation of trade systems among member states a clear testimony of how Zimbabwe can fully benefit from the entire trade facilitation system.’’

The vision to reduce the country’s huge import bill and create employment is driving the Ministry of Industry and Commerce to vigorously pursue the local content strategy.

“We are looking at internalisation of investments into the country because we have realised that this is a sustainable way to economic development and a sure way to eliminate externalisation of key resources as experienced in the past and we are very committed to see that this comes to fruition,” Sibanda added.

Economists are convinced that Zimbabwe will reap huge economic benefits by localising its value chains to stimulate downstream and upstream economic activities through strengthening import substitution strategies.

“We have been preaching the gospel of import substitution over the past years and the time to act is now such that we reduce the economy’s vulnerability to external shocks and that we avoid and minimise the burden we carry from this exogenous factor,” said Professor Gift Mugano, an economic analyst.

This can be achieved by investing heavily in production facilities and rehabilitating our infrastructures, especially in the railway network, power and water.

As a matter of strict policy, no raw material should leave the country unprocessed. Vertical integration of industry is primary at all costs. If no raw materials are to leave the country, it requires that the country has to develop the capacity to process them first (local value addition).

“As a country we made significant progress on import substitution when global supply chains were affected by the Covid-19 and we now need to solidify these gains through implementing a robust local content policy where almost everything should be of Zimbabwean origin from raw materials, packaging up to the final product,” said Titus Mukove, a development economist.

The AfCFTA seeks to create new opportunities for trade and remove trade barriers, investment, production, supply chains, and markets through improved infrastructure and connectivity for all African economies.-ebusinessweekly