adminfor industry to thrive by ensuring economic enablers improve service delivery ahead of the envisaged stiff competition from regional integration.
To promote regional integration, negotiations are in progress among countries in the Common Market for Eastern and Southern Africa (Comesa), the East African Community (EAC) and Sadc to establish a Tripartite Free Trade Area.
The FTA will result in the creation of a large market with a single economic space bigger than the existing regional blocs.
The free trade area is also expected to eliminate or reduce tariff and non-tariff barriers and other reactions of commerce thereby enhancing partner countries’ market access to the expanded market.
Zimbabwe is signatory to the Comesa and Sadc treaties and is one of the countries facing challenges of overlapping membership.
The Competition and Tariff Commission (CTC) director Mr Alexander Kububa said while the Tripartite Free Trade Area would usher in a new trade agenda, competitiveness would define winners and losers in the region.
“Accordingly, the local industry has to spruce up its act if it is to recover and ward off competition from other member states within the Tripartite Free Trade Area if it is to subsist.
“In tandem with this, Government on its part has to create the right environment for industry to thrive in and this includes ensuring that the key enablers such as electricity, water and telecommunications are available timeously, in adequate quantities and at competitive rates,” he said.
Capacity utilisation in local firms has remained low on the back of erratic power supplies, shortage of credit lines and antiquated machinery.
“The majority of plant and equipment within the industry is obsolete and subject to frequent breakdowns.
“In this regard, local manufacturing firms have to be proactive and source long-term capital to purchase modern and efficient technologies so as to tap the potential benefits of an enlarged market”.
Mr Kububa said countries in the tripartite region including Zimbabwe were in dire need of foreign direct investment to stimulate economic growth.
He said the Tripartite Free Trade Area was expected to act as a pull factor for investment in the whole region and thus attracting new investors in sectors such as agriculture, energy, financial services, manufacturing, mining and telecommunications which are crucial for economic development.
“The mere establishment of the free trade area will most likely also stimulate investment in joint infrastructural development programmes as partner countries seek to unlock all the potential benefits of trading under the Tripartite Free Trade Area,” he said.
He said the region was endowed with several valuable natural resources which, with an increase in foreign direct investment, would be exploited for the benefit of the region.
“Presently, some of the resources remain untapped due to low foreign direct investment in areas such as mining, forestry, agriculture, energy and manufacturing,” he said.
Online Reporter