Experts have warned that Zimbabwe could lose at least $1 billion per year if the country ratifies the African Continental Free Trade Area (AfCFTA) agreement. President Emmerson Mnangagwa signed the agreement two weeks ago when he attended the African Union (AU) Extraordinary Session of Heads of State and Government. The losses will result from the removal of tariffs.
International trade advisor Brian Murevererwi told The Financial Gazette,
Approximately nine to ten percent of government revenue comes from border duties so if you knock out tariffs, it will translate to losses. This is beside the fact that the agreement will expose the country to more imports.
Zimbabwe has an import bill of $5 billion so if you take out 10 percent of that, it will be a serious blow to government’s budget.
Confederation of Zimbabwe Industries (CZI) president Sifelani Jabangwe said,
In theory, agreements like this must ideally increase business leading to new business offsetting the potential revenue loss. However, if our industry is still in the state that it is in currently, we will end up losing out as a State.
Abigail Shonhiwa, the permanent secretary in the Ministry of Industry and Commerce said that a lot still needs to be done before the agreement can be implemented.