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Zimbabwe is set to reap huge benefits from the African Continental Free Trade Area (AfCFTA) if it pertinently addresses some economic structural bottlenecks, experts have said.
In a policy dialogue hosted by The News Hawks in partnership with Zimbabwe Institute of Strategic Thinking (ZIST) yesterday, Rongai Chizema, the Former Chief Technical Advisor on Industrialisation to the Africa Union Commission and leading private sector development expert, said Zimbabwe’s economic policy terrain has largely been fantastic but lamented the lackadaisical pace at implementing them for economic benefit.
“The Zimbabwean economy is largely agro-based and a number of specific policies have had a bearing on agro-processing. These include the Vision 2030, the Economic Structural Adjustment Progamme – ESAP (1991-1995). There was also the Growth With Equity (1982) and now the Industrial Development Policy (2019 – 23).
“We also have Zimbabwe National Export Strategy (2019-2023); the National Development Strategy 1, (2021 – 2025); Zimbabwe Agenda for Sustainable Social and Economic Transformation (ZimAsset, 2013-2018); the Comprehensive Zimbabwe Agriculture Policy Framework (2018 – 2030); and the Zimbabwe Agriculture Investment Plan (2013-2018) all of which are fantastic policies. What’s needed is the full implementation of these policy documents to their letter and spirit but quite often the implementation was half-backed resulting in the country losing out on the attendant economic benefits,” Chizema said.
Chizema said there are a number of structural factors to address. These include high budget deficits; international isolations and economic sanctions; the growing informality of the Zimbabwean economy; de-industrialisation and weak investment inflows; the dollarized economy and implications for firm-level competitiveness; COVID-19 Pandemic and its impacts; domestic and international debt strain; political risks; sovereign risks; and financial sector instability (currency crisis).
During the Covid-19 era and beyond, industrialisation ameliorated the impact of the pandemic but the AfCFTA member states continued to trade between and amongst themselves
“Post COVID-19, we need to put our focus on anchoring Zimbabwe’s economic recovery. COVID-19 disrupted global supply chains and there is a need for investment reshoring. To revive the health sector, we need accelerated pharma production and joint procurement of medicines and vaccines. We should give increased attention to agro-processing to ensure food security (national, regional, continental and global trends).
“Industrialisation leads to increased urbanization and affluence. It also results in technological advances. Zimbabwe needs to focus on the science, technology, engineering, and mathematics (STEM) drive as espoused under the fourth industrial revolution. Emphasis should also be on green industrialisation that embraces sustainability issues. Digitalization and regional integration are key drivers towards the success of AfCFTA,” Chizema said.
Speaking during the same event, ProfessorAlbert Makochekanwa, a Senior Lecturer in the Department of Economics and Development at the University of Zimbabwe, said the country can meaningfully gain from AfCFTA if it has manufactured products to offer.
Professor Makochekanwa bemoaned the fact that Africa remains a small player whereby its contribution to the global gross domestic product (GDP) is less than 3% as of 2021 yet in the 1960s its share was around 5%. Africa’s share in global trade (export plus imports) is also regrettably less than 3%
He said the AfCFTA is an open market of 1.35 billion in Africa. There are opportunities for investment, industrialization, and value chains.
“The AfCFTA helps towards achieving a comprehensive and mutually beneficial trade agreement among the Member States of the African Union. It also boosts intra-Africa trade. The African economic and political integration is based on eight regional economic communities recognized by the AU. These include the Community of Sahel-Saharan States (CEN-SAD); Common Market for Eastern and Southern Africa (COMESA); East African Community (EAC); Economic Community of Central African States (ECCAS/CEEAC); Economic Community of West African States (ECOWAS); Intergovernmental Authority on Development (IGAD); Southern African Development Community (SADC); and the Arab Maghreb Union (UMA),” Prof Makochekanwa said.
The AfCFTA is a continental free trade area for 55 countries. It will allow the free movement of originating products and services. It will relax restrictions on commerce. AfCFTA will allow closer cooperation amongst the countries. It was negotiated by states between 2016 to 2018 leading to the signing in March 2018 and was launched on 1st January 2021.