Zimbabwe is set to commence trading under the Africa Continental Free Trade Area (AfCFTA) following the approval of its provisional schedules of tariff concessions by the AfCFTA secretariat. This significant development was announced by Foreign Affairs and International Trade Minister, Ambassador Frederick Shava, at a recent breakfast meeting organized by the Zimbabwe Economic Society and the Friedrich-Ebert Stiftung.
The AfCFTA, established in 2018, aims to create a single continental market for goods and services, facilitating trade among African countries by reducing barriers and harmonizing regulations. With an estimated population of 1.3 billion and a combined GDP of approximately $3.4 trillion, the AfCFTA presents vast trade and investment opportunities both within Africa and globally.
Ambassador Shava highlighted that the technical verification of Zimbabwe’s tariff concession schedules is a critical prerequisite for commencing preferential trading under the AfCFTA. This process mandates member states to adopt schedules that progressively reduce customs duties on intra-Africa trade to zero percent over a period of five to fifteen years. This move is expected to enhance trade liberalization, promote structural transformation, and advance the trade of value-added products across the continent.
“The AfCFTA is the world’s largest free trade area and aims to eliminate trade barriers among member states, enhancing trade liberalization,” said Ambassador Shava. He emphasized that increased intra-Africa trade under the AfCFTA unlocks opportunities for local and global businesses to expand into new markets and consolidate their presence in existing ones. Zimbabwean businesses, in particular, stand to benefit from these opportunities, potentially attracting Foreign Direct Investment in various economic sectors.
One sector poised to benefit significantly is the automotive industry. Current trends reveal a high demand for electric vehicles, and Zimbabwe’s abundant mineral resources, such as lithium and steel, are vital raw materials for their manufacture. This positions Zimbabwe to play a crucial role in the automotive value chain, potentially becoming a hub for manufacturing components related to electric vehicles.
A study conducted by the African Export and Import Bank (Afreximbank), the AfCFTA Secretariat, and the African Association of Automotive Manufacturers (AAAM) identified several Zimbabwean companies as significant potential contributors to the African automotive value chain. These companies include Chloride Zimbabwe, United Springs, Supreme Gaskets, and Kabot Brothers.
As Zimbabwe prepares to leverage the opportunities presented by the AfCFTA, businesses and investors are encouraged to explore the potential benefits of this vast free trade area. The approval of Zimbabwe’s tariff concessions marks a significant step towards integrating the country into the broader African market, promising economic growth and development.
