Zim among top gainers of AfCFTA 

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THE World Bank says Zimbabwe is expected to be among the two biggest winners in terms of real income gains from the full implementation of the African Continental Free Trade Area (AfCFTA).
The AfCFTA pact was created by the African Continental Free Trade Agreement among 54 of the 55 African Union nations and is the largest free trade area in the world in terms of the number of participating countries since the formation of the World Trade Organisation.
In its report, titled Economic and Distributional Effects of AfCFTA, the World Bank said real income gains from full implementation of AfCFTA could increase by seven percent by 2035, or nearly US$450 billion, but the aggregate numbers mask the heterogeneity of impacts across countries and sectors.
“At the very high end are Côte d’Ivoire and Zimbabwe with income gains of 14 percent each,” read part of the report, adding that at the low end, a few countries would see real income gains of around two percent, including Madagascar, Malawi, and Mozambique.
While the continent’s real income would increase by 7 percent by 2035, Zimbabwe will register dynamic gains of 12 percent.
“The gains are unevenly distributed across the Africa region. At the very high end are Côte d’Ivoire with gains of 13 percent, and Zimbabwe with gains of 12 percent, followed by Kenya, Namibia, Democratic Republic of Congo and Tanzania at more than 10 percent.
At the lower end are a few countries clustered around a gain of two percent, including Madagascar, Malawi, and Mozambique. The gains are very closely related to the initial level of trade barriers and trade costs,” the report said.
According to the report, Zimbabwe will also register a notable reduction of time in customs due to TFA implementation to 15 and a reduction in iceberg trade costs to 10.
“The share of intra-AfCFTA exports in total exports of Zimbabwe will also rise to 28 percent, with the share of intra-AfCFTA imports in total imports of the country also rising to 66 percent.
However, Zimbabwe has already indicated that it will start implementing provisions of the African AFCTA after 15 years to give the local manufacturing industry an opportunity to recover.
Foreign Affairs and International Trade minister Sibusiso Moyo said implementing the rules right away might stifle the local industry’s recovery.
“The AFCFTA is going to allow the free movement of goods and people without any limitations and this will bring huge benefits to intra-African trade.
“However, Zimbabwe will be spared for the next fifteen years because if we do that right away, we become a dumping ground of goods because at the moment we are not producing enough,” he said in January.
The creation of the vast trade block of 1,2 billion people with an estimated market value of 3,2 trillion United States dollars is regarded as one of the greatest achievements by the African Union over the last century and is regarded as the biggest highlight of Africa’s renaissance
According to the World Bank report, the agreement would reshape markets and economies across the region, leading to the creation of new industries and the expansion of key sectors. Overall economic gains would vary, with the largest gains going to countries that currently have high trade costs.

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