COMFWB Zimbabwe Chapter Conducts AfCFTA Readiness Workshop
The COMFWB Zimbabwe Chapter held a two-day readiness workshop under The Africa Continental Free Trade Area (AfCFTA) on 15 to 16 March 2022. The objective of the workshop was to teach our members about the benefits of the Free Trade Area and how they can export their products continentally. A total of 40 ladies attended the workshop and the women were very enthusiastic to learn about this agreement. At the end workshop, they formed their own export company.
The Africa Continental Free Trade Area(AfCFTA) was launched on March 21, 2018, in Kigali, the capital of Rwanda. The trade agreement was signed by 44 heads of state and government, with nine more signing over time to make it 53 countries. The agreement gave birth to the world’s largest free-trade area in terms of the number of country participants, with market size of more than 1.3 billion consumers on the African continent. When implemented well, this agreement will be a game-changer for African trade.
The main objective of the agreement, as with other trade agreements, such as the European Union (EU), Common Market for Eastern and Southern Africa (COMESA) or Southern African Development Community(SADC), is to create a single market for goods, services, labour and capital movement to deepen the economic integration between African countries. It will eliminate 90% of customs tariffs and manage outstanding non-tariff barriers by cutting red tape and simplifying customs procedures which will bring significant income gains.
About 55% of Zimbabwe’s world exports in2020 were to African countries. Zimbabwe’s main African destination markets are COMESA and SADC countries. The value of 2020 intra-Africa exports was US$2.4billion. The exports are mainly biased towards minerals such as platinum, gold, diamonds, and nickel. Other popular commodities in the African market include tobacco, cotton, sugar, cement, and wood.
About 60% of Zimbabwe’s world imports were intra-Africa imports. These imports are mainly from COMESA and SADC countries as well with South Africa dominating on both ends. Between 2019 and 2020,intra-Africa imports increased by 32%. Maize, fertilisers, soya bean oils, petroleum oils and electricity are the main import commodities for Zimbabwe. The high cost of producing locally is one of the primary reasons why Zimbabwean products struggle to break into the export market. The high cost of doing business considers the cost of fuel, which is more expensive by more than USD0.30 if compared to the SADC regional average. Similarly, the cost of transportation locally, taxation and compliance, water, labour and property rentals are comparatively higher. To move cargo in Zimbabwe, it costs US$0.12 per tonne/kilometre using road and US$0.06 per tonne/kilometre using rail. The SADC average is US$0.07 by road and US$0.03 by rail. Consequently, local products cannot compete in the African export market.
Currently, several large-scale manufacturers outsource all their production from South Africa and simply do break of bulk and packaging locally. To address this structural constraint, the government needs to urgently reform its tax regime, especially on import and export fees, streamline permits paid to government agencies and scrap import duties paid on raw materials used by local manufacturers.
To address labour cost, the Labour Act needs to be amended to give flexibility to employers to hire contract workers easily and to terminate contracts on short notice without the burden of blanket fixed minimum retrenchment packages or imposition of permanent employee status on contract workers. The flexibility removes hesitation from various producers to hire contract workers as and when the need arises, which in effect benefits both the employee and the employer.
Our exports are predominantly raw, as such they fetch low prices on the regional market. A value addition policy has been tabled for long with meaningful progress.
The COMFWB Zimbabwe Chapter held a two-day readiness workshop under The Africa Continental Free Trade Area (AfCFTA) on 15 to 16 March 2022. The objective of the workshop was to teach our members about the benefits of the Free Trade Area and how they can export their products continentally. A total of 40 ladies attended the workshop and the women were very enthusiastic to learn about this agreement. At the end workshop, they formed their own export company.
The Africa Continental Free Trade Area(AfCFTA) was launched on March 21, 2018, in Kigali, the capital of Rwanda. The trade agreement was signed by 44 heads of state and government, with nine more signing over time to make it 53 countries. The agreement gave birth to the world’s largest free-trade area in terms of the number of country participants, with market size of more than 1.3 billion consumers on the African continent. When implemented well, this agreement will be a game-changer for African trade.
The main objective of the agreement, as with other trade agreements, such as the European Union (EU), Common Market for Eastern and Southern Africa (COMESA) or Southern African Development Community(SADC), is to create a single market for goods, services, labour and capital movement to deepen the economic integration between African countries. It will eliminate 90% of customs tariffs and manage outstanding non-tariff barriers by cutting red tape and simplifying customs procedures which will bring significant income gains.
About 55% of Zimbabwe’s world exports in2020 were to African countries. Zimbabwe’s main African destination markets are COMESA and SADC countries. The value of 2020 intra-Africa exports was US$2.4billion. The exports are mainly biased towards minerals such as platinum, gold, diamonds, and nickel. Other popular commodities in the African market include tobacco, cotton, sugar, cement, and wood.
About 60% of Zimbabwe’s world imports were intra-Africa imports. These imports are mainly from COMESA and SADC countries as well with South Africa dominating on both ends. Between 2019 and 2020,intra-Africa imports increased by 32%. Maize, fertilisers, soya bean oils, petroleum oils and electricity are the main import commodities for Zimbabwe. The high cost of producing locally is one of the primary reasons why Zimbabwean products struggle to break into the export market. The high cost of doing business considers the cost of fuel, which is more expensive by more than USD0.30 if compared to the SADC regional average. Similarly, the cost of transportation locally, taxation and compliance, water, labour and property rentals are comparatively higher. To move cargo in Zimbabwe, it costs US$0.12 per tonne/kilometre using road and US$0.06 per tonne/kilometre using rail. The SADC average is US$0.07 by road and US$0.03 by rail. Consequently, local products cannot compete in the African export market.
Currently, several large-scale manufacturers outsource all their production from South Africa and simply do break of bulk and packaging locally. To address this structural constraint, the government needs to urgently reform its tax regime, especially on import and export fees, streamline permits paid to government agencies and scrap import duties paid on raw materials used by local manufacturers.
To address labour cost, the Labour Act needs to be amended to give flexibility to employers to hire contract workers easily and to terminate contracts on short notice without the burden of blanket fixed minimum retrenchment packages or imposition of permanent employee status on contract workers. The flexibility removes hesitation from various producers to hire contract workers as and when the need arises, which in effect benefits both the employee and the employer.
Our exports are predominantly raw, as such they fetch low prices on the regional market. A value addition policy has been tabled for long with meaningful progress.
