ZIMBABWEAN businesses should leverage on areas where the country enjoys comparative advantage to reap the benefits of an integrated region following the commencement of trading under the continent-wide trade agreement, ZimTrade has said.
In its Trading Post for January, ZimTrade said trading under the African Continental Free Trade Area (AfCFTA) comes at a time when the coronavirus (Covid-19) pandemic is affecting businesses across the world, hence Zimbabwe should take advantage of sectors where the country has competitive advantage to grow it’s gross domestic product (GDP).
“For Zimbabwean businesses, successful harnessing of the benefits will require local businesses to leverage on areas where the country enjoys comparative advantage.
“These include horticulture, processed foods, leather and leather products, farm inputs and implements as well as construction and engineering.
“Horticulture remains one the key foreign currency earners for Zimbabwe and is a low hanging fruit that can be used by local businesses to establish and increase market share in other African countries,” said ZimTrade.
AfCFTA aims to consolidate the African market, made up of more than 1,2 billion people and with a combined GDP of over US$3,4 trillion. “The agreement is expected to increase trade within Africa by more than 52 percent by 2022.
“This is the largest free trade area since the establishment of the World Trade Organisation by the number of participating members. “The government of Zimbabwe has modelled the national development blueprint to ensure that local businesses take full advantage of the continental agreement,” said ZimTrade.
ZimTrade said value addition for horticulture products would also ensure that local enterprises earn more, whilst creating employment. “Local exporters will also need to ride on the reputation created by successful products in international markets.
Already, Zimbabwe is renowned for producing quality products such as Mazoe and Tanganda Tea. Local companies will also need to use regional markets as a gateway to the rest of the continent.
For example, Zambia is one of the largest trading partners for Zimbabwe and can serve as a gateway to the Democratic Republic of Congo, Tanzania, and Eastern Angola,” said ZimTrade.
ZimTrade said a thriving informal sector at Kasumbalesa border post between Zambia and DRC could be used as a gateway into DRC where local companies can establish distribution channels at the land entry point and indirectly supply the country.
The national trade development and promotion organisation said regional markets can also provide a soft landing for first-time Zimbabwean exporters, who can take advantage of good political relations, and further multilateral and bi-lateral trading agreements to land products with ease.
“For example, the favourable relations between Harare and Windhoek make it easy for Zimbabwean businesses who can export under the Southern African Development Community (Sadc) Trade Agreement and the Zimbabwe Namibia Preferential Trade Agreement, which offers preferential treatment of qualifying products to increase exports to the country,” said ZimTrade.