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TRADE-SOUTHERN AFRICA: The Deal’s Signed But Where’s The Action?

Stanley Kwenda

HARARE, Sep 12 2008 (IPS) - Cross-border trader Florence Tjani is sceptical about the free trade agreement (FTA) recently signed by southern African states.

Florence Tjani: Political will is essential. Credit:  Stanley Kwenda/IPS

Florence Tjani: Political will is essential. Credit: Stanley Kwenda/IPS

‘‘The problem is that our leaders just sign these agreements and it ends there. The only countries that seem to be implementing free trade agreements are Zambia and Mozambique. They at least allow people to trade freely.

‘‘In Zimbabwe and South Africa you need a lot of papers simply to do business. Why can't we be like ECOWAS (Economic Community of West African States) which allows citizens to do business without any hassles?’’ asked Tjani, who originally hails from Ghana in West Africa. She owns a clothing and personal care shop in Harare.

The Southern African Development Community (SADC) signed the FTA last month. Despite it being a long time in the making, the signatories seem not to have put in place the necessary mechanisms to make the FTA a reality yet.

Many informal traders, most of whom are women, are not aware of the development. Tjani read about the signing of the FTA in the newspaper but is yet to experience the benefits of such an agreement, she told IPS.

‘‘This FTA is an agreement in name only because we are still facing the same problems when we travel through the region's borders to source products for resale at home. The SADC leaders should make sure that they do something to make the FTA work because, as it is now, nothing has changed.’’

She said governments should not just sign agreements for the sake of signing but should do so with the will to implement the agreements.

The launch of the FTA could cause headaches for the Zimbabwean business fraternity. A shrinking manufacturing base has left many local supermarkets empty. There is a critical shortage of foreign currency and a blanket ban on the export of particular goods. The ever-rising inflation rate has made planning a nightmare.

The Confederation of Zimbabwe Industries (CZI), a body representing business, recently released a Zimbabwean manufacturing survey showing that the country’s factory output fell by 27 percent in 2007. The average capacity utilisation for the sector was 18.9 percent compared to 33.8 percent in 2006.

The survey also noted that the number of companies operating below 50 percent capacity increased from 49 percent in 2006 to 75 percent in 2007.

Zimbabwean exporters would not have liked the signing of the FTA to come at this particular moment, given their battle to survive. An attempt to respond to the signing of the FTA and chart the way forward for Zimbabwe’s moribund manufacturing industries came in the form of an exporters conference held two weeks ago in Harare.

The conference, organized by the government body Zimbabwe Trade (ZimTrade), was meant to discuss ways in which the country’s export sector could be revived to become competitive and respond to the FTA.

Held under the theme, ‘‘Bringing down the barriers – gearing up for export success’’, the conference brought together Zimbabwe’s central bank, ministries of industry and international trade and agriculture, the Eastern and Southern African Trade and Development Bank, the Common Market for Eastern and Southern Africa (COMESA) and SADC.

Although there was consensus at the conference that local firms should brace themselves for outside competition, ZimTrade Chief Executive Officer Herbert Chakanyuka sought to allay fears saying the country had nothing to worry about.

‘‘We have been operating under free trade arrangements with a number of countries in the region. The key to putting the country in a better position is to maximise production,’’ said Chakanyuka.

Zimbabwe’s central bank chief Gideon Gono told delegates that, ‘‘any country’s political environment sets the scene for business expectations that in turn find expression in investors’ decisions. It is imperative that all political formations in the country play their part in setting a positive tone for business and investment’’.

He challenged Zimbabwe’s export sector to work extra hard, saying a vibrant export sector was key to the country’s economic revival.

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