adminBusiness Reporter
THE recently signed African Continental Free Trade Area Agreement (AfCFTA) presents a huge opportunity for Zimbabwean companies to increase exports to the African continent, ZimTrade has said.
Once operational, the agreement, which was signed by 44 African Union member countries on 21 March 2018, will result in Africa becoming a single market. The country’s trade agency believes the AfCFTA will improve competitiveness at industry and enterprise level through market access, which will result in scale production and better re-allocation of resources.
The AfCFTA, which is the biggest agreement signed since the World Trade Organisation was formed in 1995, is a major development for African trade. The United Nations Economic Commission for Africa (UNECA) estimates that AfCFTA has the potential to increase intra-African trade by 52 percent by 2020. The intra-Africa trade in 2016 was $63 billion.
The value of trade within Africa increased by 63 percent from $58.8 billion in 2008 to $95 billion in 2012, statistics show. From 2013, trade performance followed a downward trend from $92.9 billion in 2013 to $63.5 billion in 2017. The AfCFTA is expected to improve intra-African trade, which has been on a downward trend. This is expected to stimulate and encourage trade between member countries through preferential treatment in the reduction or elimination of customs duties and other non-tariff barriers as well as investment promotion, said Zimtrade.
Zimbabwe’s exports to the region were dominated by tobacco, minerals (diamonds, nickel, iron and steel), cotton, sugar, iron and steel, salt, cotton and wood products. In 2017, Zimbabwe exported products worth $2.6 billion to the African Union. The African Union market is composed of 55 countries and the region has a population of more than 1.2 billion people with a Gross Domestic Product (GDP) of approximately $3 trillion. “This is a potentially lucrative market on Zimbabwe’s doorstep,” said the trade body.
ZimTrade’s Acting CEO, Mr Allan Majuru, highlighted that the agreement presents an opportunity for exporters to take advantage of services being offered by ZimTrade. “We provide technical intervention programmes with partners from Germany and the Netherlands, marketing and branding for international competitiveness and export packaging programmes. All these are aimed at improving production efficiency and competitiveness as enterprises look to take their products to the continent,” he said.
To facilitate the penetration to the region, ZimTrade has undertaken market researches in countries such as Mozambique, Angola, Botswana, Tanzania, Democratic Republic of Congo, Namibia, Zambia and South Sudan.
Online Reporter