Online Reporter
Theseus Mauruki Shambare in VICTORIA FALLS
AFRICA’S drive to deepen continental trade must translate into decent jobs, better wages and improved working conditions for workers, while giving businesses access to finance and markets, experts said yesterday.
The call was made at the Zimbabwe Tripartite Negotiating Forum Global Summit underway in Victoria Falls, where discussions on regional integration, investment and decent work have placed the African Continental Free Trade Area (AfCFTA) at the centre of efforts to drive inclusive economic growth.
Reserve Bank of Zimbabwe Deputy Governor Dr Innocent Matshe said financial-sector reforms had to support productive investment and economic activity if countries were to fully benefit from expanding markets.
He said the Reserve Bank had reduced the cost of funding under its Targeted Finance Facility as part of efforts to support productive sectors of the economy.
“The TFF rate was reduced from 20 percent to 15 per cent for banks and capped at a maximum all-in rate of 25 per cent for on-lending to the productive sectors of the economy,” Dr Matshe said.
As of June 30, about 70.92 percent of bank loans had been directed towards productive sectors, including agriculture, manufacturing, commercial activity and distribution.
Dr Matshe said stronger savings and investment would be critical in expanding productive capacity and supporting economic development.
“Successful transition to mono-currency strengthens monetary policy transmission, macroeconomic stability, financial sector confidence, domestic savings and investment. Hence, it is a key enabler of coordinated economic and social development,” he said.
The need to connect investment with employment was also highlighted by University of Zimbabwe Business School director Professor Albert Makochekanwa, who said increased continental trade would not automatically result in decent employment.
Prof Makochekanwa said countries needed deliberate policies to ensure that workers benefited from the expansion of regional markets, particularly as businesses adjusted to increased competition.
“Trade integration does not automatically create decent jobs. Trade can create employment but competition and restructuring can also displace workers,” he said.
He said informal employment, low wages and poor working conditions remained issues that required specific policy attention as African countries implemented AfCFTA.
“Informal employment, low wages and poor working conditions require explicit policy; skills, social protection and social dialogue should accompany trade and investment,” Prof Makochekanwa said.
The AfCFTA brings together a potential market of about 1,3 billion people, creating opportunities for businesses to expand beyond national borders and develop regional value chains.
Prof Makochekanwa said African countries should use the expanded market to move away from exporting raw commodities and instead increase processing and value addition.
He identified agro-processing, textiles, pharmaceuticals, minerals and services among areas where regional value chains could support industrialisation and employment.
“For business, we need affordable and reliable electricity, transport and logistics, affordable finance, quality certification and standards, technical capabilities, market intelligence and predictable trade procedures,” he said.
Zimbabwe National Chamber of Commerce senior economist Misheck Ugaro said the benefits of such opportunities would ultimately depend on whether policy commitments translated into actual investment, production and jobs.
He said social dialogue should therefore move beyond reaching agreements towards establishing clear mechanisms for implementation and monitoring.
“Consensus is the starting point, not the destination,” he said.
Mr Ugaro proposed a Victoria Falls Dialogue-to-Delivery Compact, under which major commitments would have a clear owner, financing path, measurable outcome and mechanism for public reporting.
He said the success of economic dialogue should ultimately be reflected in tangible improvements across the economy.
“The economic transmission chain is deposits, finance to productive firms, investment, production, jobs and incomes,” Mr Ugaro said.
The proposed approach seeks to ensure that commitments reached through social dialogue are followed by financing, implementation, measurable outcomes and public reporting.
The discussions underscore the need for regional integration, financial reforms and social dialogue to work together so that increased trade and investment translate into expanded productive capacity, employment and improved livelihoods.
For Zimbabwe, the push for deeper continental trade also comes as the country seeks to expand value addition and beneficiation while positioning local businesses to take advantage of the wider African market.
