Trade experts analyze AfCFTA’s cost-benefit for Zimbabwe
Since the official commencement of trade under the African Continental Free Trade Area (AfCFTA) on January 1, 2021, the AfCFTA has been reshaping African economies, creating a single market for goods and services thereby gradually repositioning Africa’s status in global trade agenda.
By Stephen Enoch
To this end, trade experts speaking at a virtual policy dialogue session on the economic costs and benefits of the AfCFTA for Zimbabwe Tuesday offered a cost-benefit analysis of the AfCFTA for the country, critically analyzing the potential economic gains of the Free Trade Area (FTA) as well as the economic costs associated with the gains.
While speaking at the dialogue session, International Industrial and Trade Policy Expert Rongai Chizema, said African export including Zimbabwe’s was largely dominated by semi-processed products which limit the continent’s influence on the global market, noting that although agriculture accounts for about 60-70% of employment among the Zimbabwean population, the sector was being underexploited hence could not drive structural transformation.
Mr Chizema boasts 25 years’ experience in development economics with specialization in economic and political governance, and their impacts on sustainable human development. Between 2018 and 2020, he worked as the Chief Technical Advisor at the Department of Trade and Industry (DTI) of the African Union Commission in Addis Ababa, Ethiopia, where he coordinated the implementation of the continent’s industrialization frameworks, particularly Accelerated Industrial Development for Africa (AIDA).
While speaking on the AfCFTA’s implications for Zimbabwe’s industrialization, Mr Chizema said the FTA provides the country with a bigger market and an opportunity to unleash its under-utilized industrial capacity, opportunities for regional value chain development, cross-border investment as well as a vast opportunity to de-risk Zimbabwe’s investment regime.
However, Mr Chizema said the economic benefits for Zimbabwe from the AfCFTA revolves around anchoring economic recovery from Covid-19, repurposing the country’s health sector through accelerated pharmaceutical production, increased attention to agro-processing and urbanization as well as digitalization of trade and industrialization processes, particularly in the context of Industry 4.0.
Also speaking, Prof. Albert Makochekanwa of the University of Zimbabwe noted that the AfCFTA would allow for free movement of originating products and services, relax restrictions to commerce and foster closer cooperation amongst the countries. In term of economic costs, Prof Makochekanwa said competition will be open hence Zimbabwean products had to compete with products from the rest of Africa adding that any requests for trade remedies or protection of infant industries had to be justified.
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