ZIMBABWE is revitalising its value chains as a strategy to ensure local businesses benefit more when the African Continental Free Trade Area (AfCFTA) implementation starts in January next year.
The World Bank has tipped the country, alongside Cote d’Ivoire, among top African countries that will benefit immensely in terms of higher income growth from the AfCFTA, which will create an integrated market of 1,3 billion people.
Zimbabwe officially joined the African Continental Free Trade Area (AfCFTA) in February this year when President Emmerson Mnangagwa attended the 33rd Ordinary Session of the Assembly of Heads of State and Government of the African Union in Addis Ababa, Ethiopia.
Trade experts are agreed that the AfCFTA agreement would reshape markets and economies across the region, leading to the creation of new industries and the expansion of key sectors.
Industry and Commerce Minister, Dr Sekai Nzenza, told business leaders who attended the recent sectoral strategic planning indaba in Bulawayo that revitalising key value chains would position Zimbabwe for greater gains under the AfCFTA. The key value chain targets include: the agro-based value chain, pharmaceutical, textiles, leather value chain, bus assembly, SMEs development, tobacco, iron and steel and the general engineering value chains.
“The ministry has been focusing on a number of strategies and legislative amendments in order to give effect to the Zimbabwe Industrial Development Policy. The priority is to create a favourable operating environment for industry through the ease of doing business,” said Dr Nzenza.
“This also is to enable strategic value addition and beneficiation to our local resources as we prepare to enter the export market through the ACFTA and other international instruments.
“In particular, the ministry is focusing on amending the Sugar Act and drafting the leather and leather products strategy, pharmaceutical sector development strategy and the cotton to clothing strategy.
“We should also focus on creating synergies with the agricultural value chain, by deliberately coming up with programmes meant to improve production capabilities with a view to reduce poverty and increasing incomes.”
According to global trade experts overall economic gains would vary, with the largest gains going to countries that currently have high trade costs. Côte d’Ivoire and Zimbabwe — where trade costs are among the region’s highest — are set to see the biggest gains, with each increasing income by 14 percent. Overall, AfCFTA represents a major opportunity for countries to boost growth, reduce poverty, and broaden economic inclusion.
Despite the adverse impact of the Covid-19 pandemic and the shocks it induced on industries and enterprise, Dr Nzenza said the lockdown period has motivated local businesses to embrace innovation.
Cognisant of the shocks and lessons learnt from the pandemic, the minister also said it was time for Industry to look inwards and localise production and implement the Local Content Strategy so as to promote local consumption.
Part of the Government’s long-term game plan involves promotion of rural industrialisation by taking advantage of comparative advantages that exist in each province and utilising locally available resources within that framework. This model is also within the context of the country’s devolution thrust, thus, creating areas of collaboration with the provincial ministers and leadership as the country decentralises the economic activity.
In order to achieve the above goals, Dr Nzenza stressed the need to embrace research and innovation within the country’s local industries by working closely with research institutions and innovation hubs at universities.
“This is critical for enhancing the capability of companies to stimulate innovative methods of production, reduce costs and improve product quality,” she said.