ZIMBABWE has emerged as one of the eight countries in Africa that have not submitted or verified the African Continental Free Trade Area (AfCFTA) tariff schedule despite having huge potential to benefit from the trade agreement, a senior World Bank official has said.
BERNARD MPOFU
AfCFTA is the largest free trade area since the formation of the World Trade Organisation (WTO) in 1995.
The free trade area was established to increase intra-African trade which currently ranges between 15-18%, stimulate production through the development of regional value chains, strengthen the capacities of African businesses to access and supply world markets, and strengthen Africa’s economic and commercial diplomacy.
Trading under the auspices of the AfCFTA began on 1 January 2021, two years after the continent’s 54 states ratified the trade agreement. The AfCFTA will see the progressive liberalisation of tariffs, with major deadline coming up in 2025.
In a paper presented to delegates attending the Confederation of Zimbabwe 2024 Economic & Business Outlook Symposium, Victor Steenbergen, a senior economist at the World Bank local office, said the southern African nation may miss out on opportunities presented by AfCFTA.
“Tariff-free trading in goods starting soon, Zimbabwe is lagging behind. Zimbabwe is one of the biggest potential beneficiaries of AfCFTA with +12.4% to GDP growth,” Steenbergen.
“46 countries have submitted their tariff schedules. Zimbabwe is lacking behind. Sub-Saharan Africa region is projected to rebound in 2024, though aggregates mask a mix of upgrades and downgrades at the country level.”
The multilateral creditor says global and regional headwinds which have triggered high interest rates and elevated debt will result in rising external debt liabilities or fiscal pressure.
Meanwhile, Zimbabwe’s Finance ministry has resumed negotiations with creditors and the international community as Treasury seeks to resolve the country’s nagging debt overhang. With the country remaining in debt distress while borrowing is limited, public debt has continued to increase, driven by external arrears and legacy debt.
Official figures show that despite making token payments over the past few years, Zimbabwe’s total debt stock has soared to US$18 billion as of December 2023.
