eBusiness Weekly
Business Writer
Local companies should take delay in the implementation of an Africa-wide free-trade agreement to come-up with products that will compete across the continent, Zimtrade chief executive officer Allan Majuru has said.
The African Continental Free Trade Area (ACFTA), which was supposed to come into effect on the 1st of July, is no longer proceeding as planned due to disruptions caused by the coronavirus outbreak, according to the zone’s secretary-general Wamkele Mene.
The ACFTA trade pact could cover a market of 1,2 billion people with a combined Gross Domestic Product of $2,5 trillion, making it the world’s largest free-trade zone.
Legally, the agreement is already in force, but in order to have made the July deadline for the start of trade in goods and services under the new tariff rules, several details needed to be ironed out as part of phase one of the process.
“It is obviously not possible to commence trade as we had intended on July 1 under the current circumstances,” Mene, said during a conference call as reported first by Reuters.
He, however, expressed confidence the deal would still go forward at a date yet to be announced.
“The political commitment remains, the political will remains to integrate Africa’s market and to implement the agreement as was intended,” he said.
Implementation of the trade pact, according to Mene, will act as a stimulus package for African countries post the coronavirus pandemic.
“That’s our stimulus package. That’s how we’re going to get back on track as Africa.”
Majuru said with most countries on the continent restricting cross-border movement, targets set out in the African Continental Free Trade Area agreement would be negatively affected if implementation was to go ahead as planned.
“We need to understand that the coronavirus pandemic has disrupted plans and targets for this year and this is not only unique to Africa but across the world,” said Majuru.
He however reiterated that successful implementation of the continent-wide trade agreement has immense benefits.
He said since the trade pact is anchored on increased and smooth flow of people in Africa, especially business persons, the increased interaction will necessitate better trading partnerships between businesses on the continent.
As a result, with the date to commence trade moved forward, “local companies should take the time created to come-up with products that will compete across the continent”.
“There is also need to strengthen export strategies that will allow local companies to capitalise fully on the agreement once trading begins,” Majuru said.
