Trade agreement presents opportunity for Zim’s UK exports

Michael Tome

Business Reporter

THE Economic Partnership Agreement (EPA) between the United Kingdom (UK) and Eastern and Southern Africa (ESA), which includes Zimbabwe, presents a significant opportunity for local exports to access the UK market.

Zimbabwe is among the ESA countries, which also include Mauritius, Seychelles and Madagascar, that have signed the EPA with the UK.

The EPA is an economic arrangement aimed at removing barriers to the free movement of goods, services and investment between countries.

It is considered an intermediate step towards economic integration as it paves the way for deeper trade relationships and economic growth.

According to a senior UK embassy official, EPAs are designed as development-focused free trade agreements, with the intention of deepening trade relationships, fostering economic growth, supporting economic diversification and enhancing the competitiveness of Zimbabwean products.

Despite Zimbabwe being the UK’s 102nd largest trading partner in the year leading up to March 2024, accounting for less than 0,1 percent of the total UK trade, implementation of the EPA is expected to provide impetus for Zimbabwe to expand its exports to the UK, given reduced trade limitations.

With the total value of UK imports reaching £641 billion last year, and £19 billion originating from Africa, Zimbabwe has an opportunity to tap into this substantial import bill given the growing demand for the country’s merchandise, signalling a bigger scope for enhanced trade between Zimbabwe and the UK.

Zimbabwe has already established a notable presence, particularly in the supply of fresh fruits, vegetables, tea and nuts.

There is also a growing demand for blueberries, macadamia nuts, citrus, flowers and groundnuts.

Although Zimbabwe’s exports to the UK have been mainly low-value semi-processed goods, the UK has expressed its willingness to assist in enhancing the
value addition of some of Zimbabwe’s exports.

Speaking during the Zimbabwe-United Kingdom Business Forum held in Harare on Thursday, Zimbabwe’s Ambassador to the UK, Colonel Christian Katsande (Rtd), emphasised the potential for this cooperation to enable Zimbabwean businesses to access the lucrative UK market, particularly given the high standard of Zimbabwe’s products.

“This landmark agreement paves the way for expanding and diversifying trade between the two nations and bolsters Zimbabwe’s ambitious goal to achieve a 10 percent annual growth in exports to surpass the targeted US$14 billion by
2030.

“As we work to advance our business interests, all of us must prioritise the cultivation of enduring relationships by ensuring ongoing communication and updates on the mutual issues affecting our respective nations,” said Ambassador Katsande.

British High Commission’s head of trade policy for Southern Africa Ms Natasha Stotesbury said the collaboration would send a positive signal to prospective foreign investors who are seeking long-term certainty to invest in Zimbabwe.

“The UK’s Economic Partnership Agreement with Eastern and Southern African Nations, including Zimbabwe, entered into force in 2021.

“It provides a number of benefits for Zimbabwean businesses, particularly those that want to export to the UK.

“Benefits from the EPA between the
UK include permanent duty-free, quota-free access for all Zimbabwean
goods to the UK, except arms and ammunition.

“The agreement also includes flexible rules of origin to help promote intra-regional trade and help strengthen supply chains, making it easier for Zimbabwe to qualify for that duty-free, quota-free access to the UK markets.

“The agreement also includes commitments on development cooperation,” said Ms Stotesbury.

Lately, the UK has been conducting capacity-building initiatives in the country.

Through the British International Investment, it recently provided a US$10 million loan to NMB Bank to support on-lending to exporting agribusinesses and climate-smart investors.

Approximately 70 percent of the financing targeted capital expenditure like machinery, while 30 percent targeted sustainable agricultural projects, as well as promoting climate change mitigation and adaptation.

Development cooperation through the UK Trade Partnerships Programme has been supporting Zimbabwean businesses since 2020 by offering technical assistance and capacity building to boost production and export capacity.

The programme has also organised workshops for women-led businesses, in partnership with ZimTrade and the Ministry of Women Affairs, Community, and Small and Medium Enterprise Development, as well as a small and medium enterprise advisory workshop for members of the Horticultural Development
Council.