Tulani Ngwenya & Amanda Erina Nicola Jojo
PRETORIA – South Africa and Zimbabwe must identify areas where they can benefit mutually in the African Continental Free Trade Area (AfCFTA), the World Economic Forum has said.
AfCFTA was officially launched on January 1 this year and it became the world’s largest trade pact.
As of January 15, 35 African countries had deposited their instruments of ratification. These are South Africa, Ghana, Zimbabwe, Kenya, Rwanda, Niger, Chad, Eswatini, Guinea, Côte d’Ivoire, Mali, Namibia, Congo Republic, Djibouti, Mauritania, Uganda, Senegal, Togo, Egypt, Ethiopia, Gambia, Sahrawi Arab Democratic Republic, Sierra Leone, Burkina Faso, São Tomé & Príncipe, Equatorial Guinea, Gabon, Mauritius, Central African Republic, Angola, Lesotho, Tunisia, Cameroon, Nigeria and Malawi.
In a paper titled “Connecting Countries and Cities for Regional Value Chain Integration – Operationalising the AfCFTA”, the World Economic Forum and Deloitte said for member states within the AfCFTA to maximise market advantages, they must develop value propositions.
“It is important for industrial policy to be based on current and future advantages that a specific economy possesses or can cultivate in future. These advantages will ensure that the country is competitive regionally and possibly globally from either a cost and/or a production standard point of view,” the report reads.
“Furthermore, by diversifying and increasing their variety of exports, countries are able to increase trade possibilities with other countries. A greater variety of exports and increased complexity of products also works to better insulate industries from shocks in specific markets.”
Addressing challenges to intra-Africa trade, the report said there was need to boost internal capabilities to produce and also for products to be cost competitive and to adhere to international standards.
“First, production capabilities play an important role in the extent of value chain participation. If countries are not able to transform raw materials and intermediate goods at competitive prices, they may find that they can participate in only a few levels of the value chain,” the report authors said.
Zimbabwean economist Vince Muswere said to make AfCFA work, an aggressive Africa exports initiative was critical and he held the country’s national trade development and promotion agency Zimtrade on creating awareness as far as AfCFTA is concerned.
“What is key is a thorough research by us on what we can trade with all the partners in AfCFTA and a strategic plan on how we can take full advantage of this opportunity.
“We need to make trading with Zimbabwe easier and less costly while creating an awareness to Zimbabwean businesses of the benefits,” said Muswere.
Muswere highlighted that there is a complementary relationship between trade and tourism, in this regard there is need to engage tourism players in the AfCFTA strategy.