EDITORIAL COMMENT: Free Trade Area to aid Zim economic revival

11 Feb, 2020 - 00:02 0 Views
EDITORIAL COMMENT: Free Trade Area to aid Zim economic revival President Mnangagwa

The Chronicle

THE African Continental Free Trade Area (AfCFTA), which Zimbabwe officially joined on Sunday despite outstanding issues, will assist the country in its economic revival efforts. 

We wish to congratulate the African Union for establishing the AfCFTA as it will go a long way in boosting intra-Africa trade and the economies of its member states. The free trade area is the largest in the world in terms of the number of participating countries since the formation of the World Trade organisation. 

The agreement initially requires members to remove tariffs from 90% of goods, allowing free access to commodities, goods, and services across the continent. The United Nations Economic Commission for Africa estimates that the agreement will boost intra-African trade by 52 percent by 2022. 

The general objectives of the agreement are to create a single market, deepen the economic integration of the continent and establish a liberalised market through multiple rounds of negotiations. It also seeks to aid the movement of capital and people, facilitating investment and movement towards the establishment of a future continental customs union. 

The AfCFTA wants to achieve sustainable and inclusive socio-economic development, gender equality and structural transformations within member states. It also seeks to enhance competitiveness of member states within Africa and the global market. 

Other objectives of the free trade area are to encourage industrial development through diversification and regional value chain development, agricultural development and food security while resolving challenges of multiple and overlapping memberships. Zimbabwe, which is undertaking reforms to put its economy on a positive trajectory will now enjoy the benefits of a continent-wide free trade area, allowing its access to the largest market in the world of 1,2 billion people worth US$2,5 trillion. 

In June last year, Government said it would fully implement the AfCFTA after 15 years, when the country is expected to have fully industrialised. 

In his address at the Closed Session of the of the 33rd Ordinary Session of the Assembly of the Heads of State and Government of the AU in Ethiopia on Sunday, President Mnangagwa announced that Zimbabwe was now on board. 

“I would equally like to thank President Issoufou the Champion of the AfCFTA for his dedication and commitment to ensuring the implementation of the free trade area. Zimbabwe is cognisant that the AfCFTA is one of our agenda 2063 flagship projects which has its success anchored on the commitment and political will of member states. 

“We are also aware that challenges relating to implementation modalities will need to be addressed if we are to achieve the desired outcomes. Subsequently, however, in the spirit of moving forward and our commitment to the principles that inspired the establishment of the AfCFTA, we are prepared to move on the basis of the agreed collective position,” the President said. 

“Therefore, Zimbabwe is now on board.” We welcome the decision by Zimbabwe to join the AfCFTA and are confident that despite some outstanding issues relating to implementation modalities, the country will achieve the desired outcomes and benefit from membership of the organisation. 

We are also immensely proud of the AU for championing the continental free trade area as this dovetails with the objectives of its successor bloc — the Organisation of African Unity. 

At its formation in 1963, the OAU aimed to promote co-operation between African states and minimise reliance on the West by promoting intra-African trade. Zimbabwe, which is under sanctions imposed by the United States and the European Union, has noted that it will not fully benefit from the free trade given the myriad of challenges affecting local industries. President Mnangagwa said Western countries need to lift sanctions for Zimbabwe to fully enjoy the benefits of membership of the AfCFTA. 

“Well, Zimbabwe is in a peculiar position. We are now in two decades of sanctions and they have not been removed. So, the priority issue now is to have those sanctions removed to allow our economy to recover and participate fully into the ambition of the continent to modernise and industrialise our countries,” he said. 

We agree with the President that sanctions need to be lifted for Zimbabwe to have a fair chance of economic revival. We urge Sadc and the AU to continue supporting Zimbabwe in its bid to have the punitive measures lifted. In the same vein, we call on the West, particularly the US, to consider re-engagement rather than hostility towards Zimbabwe. While notable progress has been made with the EU on the issue of sanctions, the US is hardening its stance towards Harare — jeopardising efforts to normalise relations. 

By establishing the AfCFTA, Africa is catching up with the rest of the world where economic blocs are removing barriers to trade. We are aware of the impediments to fully implementing the free trade area but those are not insurmountable. With unity of purpose, Africa can become one big market for all its peoples.

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