The International Monetary Fund (IMF) recently took an unusual stance in about two decades – praising Zimbabwe for its economic transformation trajectory since 2017.
With global nations in the midst of a ravaging Covid-19, which has decimated economies, the Bretton Woods institution not only singled out Zimbabwe for its resilience to the virus, but for absorbing other exogenous shocks such as the 2019 Cyclone Idai.
This also comes as Harare qualified, three months ago, for US$800 million Special Drawing Rights (SDR) under the IMF’s new US$650 billion rescue package for nations in light of Covid-19.
The SDR is the IMF’s international reserve asset created in 1969 to supplement its member countries’ official reserves.
However, the US$1,1 billion kitty, still does not qualify Zimbabwe to secure US$2 billion in new funding unless the country pays off US$7,66 billion arrears to international financial institutions — the World Bank, European Investment Bank, The Paris Club and African Development Bank.
In praising Zimbabwe’s economic developments, over the last three years, IMF staff team to Zimbabwe, led by Mr Dhaneshwar Ghura, in its report — after a virtual meeting between Harare and the fund — added that the country’s outlook depended on the Covid-19 evolution, vaccination programme and sustainable policy implementation.
The report then continued: “The IMF mission notes the authorities’ efforts to stabilise the local currency and lower inflation . . . further efforts are needed to solidify the stabilisation trends and accelerate reforms.”
The statement is clear it can take long for Zimbabwe to access funding for economic development from institutions such as the IMF, established in 1944, to promote international financial stability and monetary cooperation.
What this means is that Zimbabwean authorities have to continue looking at internal remedies to uplift the economy, coupled with regional cooperation for development.
Calls have thus been amplified for the country to look closer home and turn to economic development opportunities available through the continent’s economic partnership protocols such as the Africa Continental Free Trade Area Agreement (AfCFTA), which came into effect in January this year.
Addressing guests at the launch of the Zimbabwe National Chamber of Commerce (ZNCC) AfCFTA sensitisation and training workshops in Harare recently, Foreign Affairs and International Trade Deputy Minister David Musabayana said Zimbabwe stands to benefit from the agreement.
He said: “The potential benefits for the country include access to export and import markets, reduced preferential customs duties and easing of trade protocols making it easy for local countries to export.”
Speaking during the same platform, ZNCC president Tinashe Manzungu acknowledged that many companies in the country were set to benefit from the trade agreement, with the national economy emerging the overall winner.
He highlighted that with Zimbabwe’s exports averaging US$4 billion against an import bill of US$6 billion annually, the trade agreement can see the country increase its export basket after moving up the value chain in order to satisfy continental competition. Already, the country has shown commitment in the deal after having ratified it in 2019 and last week moved to remove visa requirement for visitors coming from Southern African Development Community member countries.
The move is positive in facilitating regional trade and is in line with continental aspiration of free movement and increased trade.
According to the Africa Union (AU), the AfCFTA will create a single market for goods and services with the primary objective being to increase trade among African nations.
Thus, the major emphasis of the agreement is to implement protocols to eliminate trade barriers and promote harmonisation of member states competition policies and other trade liberating strategies.
Zimbabwe can tap into the agreement which is expected to boost intra-African trade by 53,3 percent once import duties and non-tariffs barriers are eliminated.
The trade agreement also emphasises the closing of the gap in Africa’s extractive imports.
With information showing that Africa exports to other continents 75 percent of its extractive commodities, the AfCFTA seeks to encourage member states to lock their natural resources on Africa manufacturing industrial goods.
For years, Zimbabwe has lamented the loss of its minerals in raw form, only to buy products after the resources have been value added outside the country. The country has potential to invest in industries to value add its resources for the continental market.
The industrialisation drive should draw inspiration from the continental agreement’s potential to double Africa’s manufacturing sector to $1 trillion by 2025 while creating 14 million stable jobs.
Development in Zimbabwe cannot leave out women from the equation.
It is estimated that 70 percent of informal cross boarder traders in the country are women and with the AfCFTA promoting continental trade, the group stands to benefit more.
Also, the informal conduct of business by women had exposed them to harassment at ports of entry and in other countries, but once trade regulations are synchronised, the development of women will be enhanced.
Zimbabwe has a lot to benefit from embracing the AfCFTA in the wake of hostilities from Western-backed financial institutions.
With the country failing to get the required bailouts to improve its economy, it appears the solution lies in finding home grown solutions and taking full advantages of economic partnership protocols such as the AfCFTA.
This means focusing more on the continent can do the country good as it is likely to increase trade by exporting to the African market.
Under AfCFTA, and because of its strategic position in the region, Zimbabwe can become a hub of trade as it provides one of the shortest routes to reach further north of the continent.
Benefits of the AfCFTA are expected to cut across all sectors, not only in Zimbabwe, but in the whole of Africa.
Trading on the basis of the AfCFTA started on January 1 this year, with the Pan-African Private Sector, under the umbrella body of the African Business Council (AfBC), issuing a press statement in support of the initiative.
Taking a peek into what the new regional trading protocol, the council said it presented enormous business opportunities for the Pan-African Private Sector, Small and Medium Enterprises, women and youths.
The launch of start of trading on the basis of the AfCFTA followed the African Union Assembly’s decision made on 5 December 2020 at the 13th Extra Ordinary Session of the Assembly of the Union on the AfCFTA.
It is expected that the AfCFTA will avail opportunities to enhance inter-Africa trade in many sectors, including manufacturing, distribution, transportation and health eco-systems.
The AfCFTA will enhance trade by eliminating tariffs on intra-Africa trade, making it easier for businesses to trade within Africa and benefit from their own growing market; introduce regulatory measures such as sanitary standards and eliminating non-tariff barriers to trade and establish, in the future, a Common Continental Market.