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Ambassador James Manzou
Parliament recently passed the African Continental Free Trade Area (AfCFTA), a powerful engine for economic growth and development.
The instrument now awaits the signature of the President.
The potential benefits of the AfCFTA to Zimbabwe include the opening of trade to wider African markets. Participation by Zimbabwe in the AfCFTA would mean opening up to 29 additional countries, mainly from Central Africa, West Africa and North Africa, which provide an enlarged market access for the country’s exports.
There is little trade at the moment with almost all of these 29 countries and the establishment of the AfCFTA creates opportunities to enhance trade and economic relations with these States.
The AfCFTA will bring together all 55-member-states of the African Union covering a market of more than 1,2 billion people and a combined Gross Domestic Product of more than US$3,4 trillion.
In terms of numbers of participating countries, the AfCFTA will be the world’s largest free trade area since the formation of the World Trade Organisation (WTO).
Estimates from the Economic Commission for Africa suggest that the AfCFTA has the potential to boost intra-African trade by 52,3 percent by eliminating import duties and to double this trade if non-tariff barriers are also reduced.
The AfCFTA will serve as an impetus for investment in Zimbabwe and Africa’s cross border infrastructure.
Building infrastructure will also create additional jobs and increase the development of engineering services.
The prospects for the larger markets and supporting infrastructure will spur industrial development.
This will not only create jobs, but will also have the advantage of diversifying Zimbabwe’s economy, which is largely dependent on raw materials.
The associated technological development will lead to the creation of new industries.
The signal of a larger market will also help to stimulate trade in services with the first beneficiary likely to be the financial sector, which will be able to lend to larger industrialists seeking to benefit from economies of scale.
Such financial services will reinforce the increase in cross border investments by emerging African firms that are serving as regional champions of industrial development.
By being party of large market, Zimbabwe will no longer be restricted to producing a small range of products for the regional market.
With its open for business mantra and efforts to improve ease of doing business and human resources, Zimbabwe can become the locus of new manufacturing operations that serves wider markets.
By providing a single economic space with harmonised regional trade policies and a regulatory framework, the AfCFTA solves the problem of multiple memberships, rationalises trade negotiations, reduces the cost of doing business, supports industrialisation and stimulates cross border infrastructure projects.
Ambassador James Manzou is secretary for Foreign Affairs and International Trade. He spoke to The Sunday Mail reporter Charity Musareva.
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