Zimbabwe yet to fully utilise Continental Free Trade

THE Deputy Minister of Foreign Affairs and International Trade, Dr David Musabayana has said Zimbabwe is yet to fully utilise its trade potential in the African Continental Free Trade Area (AfCFTA) to spur economic growth and development.

Speaking as the Guest of Honour during the Zimbabwe National Chamber of Commerce trade conference held in Bulawayo on Friday, Dr Musabayana said the country’s natural resource endowments, strategic regional location, and the relatively well-educated and easily trainable labour force were key attributes to facilitate trade as an engine of growth.

“Our exports have averaged US$4 billion annually against an import bill of US$6 billion in the past decade. The country has been saddled with a trade deficit of US$2 billion annually — which is unsustainable. Our export basket is dominated by primary commodities — mainly minerals and tobacco (over 70 percent).

“Manufacturing contribution to total exports has gone down from 40 percent in the 1980s to less than 15 percent currently. Exports of services have also stagnated at an average of US$500 million annually — contributing around 10 percent to total export earnings. In terms of markets, our exports continue to be limited to a few traditional markets, mainly South Africa and few Sadc countries. Exports to Europe, China and the Americas remain well below potential.”

Dr Musabayana noted that Government, through the National Development Strategy 1 (NDS1) and the National Trade Policy and Export Strategy, has prioritised trade development and promotion as key strategies to grow exports.

Despite the Covid-19 pandemic, the country’s exports increased by three percent in 2020 and exports have continued to sustain the economy over the years contributing more than 60 percent of the country’s foreign currency earnings.

The Deputy Minister also said NDS1 identifies a number of strategies to influence the country’s international trade policy and in order to consolidate external sector stability, a combination of export orientation and import substitution strategies will be prioritised during the Strategy Period, particularly where the country has a competitive advantage.

Dr Musabayana said the National Trade Policy and Export Strategy target was to grow total exports by at least 10 percent annually and places emphasis on exports of value-added goods and services.

“Our 7/14 Export Targets towards Vision 2030 remain standing despite the setback of the Covid-19 pandemic – that is increasing exports to US$ 7 billion by 2023 and to US$ 14 billion by 2030,” he added.

He said there was potential for Zimbabwe to generate foreign exchange through export of various services including tourism, education, and professional services, among other services. Dr Musabayana said that the private sector needed to play its part while Government does its part to facilitate production of goods and services for export.

“Due to the small size of our internal market, it is important that our companies employ aggressive marketing strategies. May I encourage companies that are associated with ZNCC, CZI and other business associations to register with ZimTrade to be able to get requisite support services for export development and promotion, and export market intelligence.

“Companies also are encouraged to strategically and aggressively utilise the preferential market access opportunities available in the region under the auspices of SADC, COMESA, AfCFTA and beyond the continent such as the Economic Partnership Agreements with the European Union and the United Kingdom to increase exports.”

Dr Musabayana highlighted that Government as part of the export-oriented industrialisation agenda towards Vision 2030 was spearheading the trade promotion initiatives. Some of its pillars included market access negotiations, joint commissions, capacity building initiatives for the private sector, national quality infrastructure, Zimbabwe EPA Support Project (ZEPA) and the United Kingdom Trade Partnership (UKTP) Programme.

In addition, there was also trade facilitation as a priority under NDS1, COMESA Simplified Trade Regime (STR), Non-Tariff Barriers (NTBs) and Trade in Services which offer the country immense opportunities in trade, to name just a few.

Dr Musabayana said that for Ease of Doing Business Reforms, Government and private sector had to continue to engage and a number of reforms were being implemented by Government based on recommendations from the business community.

“The business sector is encouraged to continue making submissions through ZNCC, CZI, ZimTrade, and other business associations, on any challenges and bottlenecks being faced in the process of conducting their business. Government is ready to engage on these issues holistically,” he said.

He said through the main foreign policy agenda enunciated by President Mnangagwa, which was advancing economic and commercial diplomacy, trade and investment promotion activities were now the priority focus at the Diplomatic Missions abroad.

Dr Musabayana encouraged the business community to produce for export and take advantage of the various trade agreements that Zimbabwe is party to, with the latest one being the AfCFTA which is intended to promote intra-Africa trade, as trade was undoubtedly the engine for economic growth and development.

In his presentation, on the industry’s preparedness towards implementation of AfCFTA, Deputy Minister of Industry and Commerce, Cde Rajesh Modi said businesses should take advantage of the opening up of the markets and be ready to implement their projects. He added that the AfCFTA presented linkages for business with other sectors of the economy and there was a huge market for private sector goods and services supply.

In a virtual presentation, Finance and Economic Development Minister Professor Mthuli Ncube said Zimbabwe was strategically placed as a regional transit or gateway into Africa, mainly to Eastern and Central Africa.

He noted that the successful implementation of AfCFTA will result in a potential for Africa’s manufacturing sector to double in size from US$500 billion in 2015 to US$1 trillion in 2025, creating 14 million decent jobs, boost intra-African trade by 52.3 percent and Zimbabwe would also benefit from this.

Prof Ncube added: “The trade initiative will also diversify our trade as it would encourage more industrial goods as opposed to extractive goods and natural resources and this is in line with NDS1 thrust of Moving the Economy up the Value Chain and Structural Transformation.”-herald.cl.zw