COMMERCE Minister Christopher Yaluma has urged local producers to take advantage of the COVID-19 pandemic and prepare themselves to access the Africa Continental Free Trade Area (AfCFTA), whose instruments will soon be handed over to the African Union once ratified by Parliament.
And Yaluma says despite the closure of borders in other countries, bilateral trade has continued with Zambia, but at a slower pace with reduced volumes.
The AfCFTA is a Free Trade Area, which aims to bring together all 55 member states of the African Union covering a market of more than 1.2 billion people, including a growing middle class, and a combined Gross Domestic Product (GDP) of more than US $3.4 trillion.
In terms of numbers of participating countries, the AfCFTA will be the world’s largest Free Trade Area since the formation of the World Trade Organization (WTO).
The Agreement entered into force on May 30, 2019, for the 24 countries that had deposited their instruments of ratification, with the African Union Commission (AUC) Chairperson.
Zambia has signed up to the Agreement, but Parliament is yet to ratify and domesticate the document to join the Free Trade Area and benefit from open market access.
In an interview, Yaluma said there were huge opportunities on the continental market, hence the need to build capacity among local manufacturers and begin to boost domestic productivity during the current COVID-19 pandemic.
“If I tell you, right now, amongst us Africans, we only trade 18 per cent amongst ourselves; the rest is going outside the continent, which is not a good move to take. We have lost out on our own intra-business market. So, we are saying, ‘let’s trade among ourselves and grow ourselves as African countries.’ So, what we are doing right now, for Zambia, is to ensure that we capacitate our manufacturers, small-scale Non-Traditional Exports (NTEs) so that they can, at this time of COVID, use this opportunity to also start depending on our own products, our own produce in preparation that we can now hit the regional market, hit the COMESA market and hit the AfCFTA. We are very much opportune, but because we can’t get much imports now, this is the time we should build our own production,” Yaluma said.
“Preparedness, we are very prepared and we are pushing as much, we have sensitized, we have consulted all stakeholders and consultation is still ongoing to prepare our manufacturing, to prepare our suppliers that whatever they produce is of quality to compete adequately on this huge, wide market, which is coming up. And how do we prepare for that, currently, we are, as Zambia, trading regionally as SADC; we are trading again regionally as COMESA Tripartite Market, but that’s a springboard of going and ensure that we are getting ready to go that big market. So, as it is, there are so many opportunities, the opportunity is our products from Zambia will hit the entire Africa.”
He said the COVID pandemic had slowed the process of actualizing the AfCFTA as it would have been ratified by Parliament.
“Remember first, the COVID is affecting each and every country in Africa as well as abroad, obviously globally, and the launching of the commencement of trading of the Continental Free Trade Area was scheduled to have started somewhere in July, but now with what has happened it still stands to be seen when effectively it could be started. We have made some few milestones, this May on the 20th , we were supposed to have been in South Africa to wind up on the trade issues, barriers, consent to the trade submissions or tariffs by each country, now we can’t because of the same thing. So, which means we have lost one deliverable, which could have been key in ensuring that we start trading continentally. So, as it is right now, we are looking at moving the commencement further,” he said.
“Now, as Zambia we endorse, as a government, to the initiation of the Africa Continental Free Trade Area, second move we took, we went out again, the President (Edgar Lungu) endorsed, signed the same Agreement of the Free Trade Area and how it’s going to operate, Zambia also endorsed that. Third, what we are waiting to do right now, which we could have done if we didn’t have any stop if the Parliament was to ratify the Africa Continental Free Trade Area by Zambia and then deposit the instruments of ratification with AU, that’s the last stage. This we should have done had we not shut Parliament, but be as it may, as we move into Parliament, we are going to do that and submit the instruments of ratification with the Africa Union that says, ‘Zambia has acceded to the Africa Continental Free Trade Area.’ So, that’s where we are.”
And Yaluma said essential goods were still coming into Zambia, but trade volumes had drastically reduced due to border restrictions imposed by countries in the region.
“You see, we are not getting the imports or exporting as much as we have been doing because of the same border restrictions, but we as Zambia, we said we are not locking, we are not shutting down, we will allow to operate, let the economy run slowly. We are already landlocked so we can’t just say, ‘let’s lock ourselves out,’ but goods are coming in, essential goods. Essential goods is not only about food, it entails whatever is critical to our economy like critical spares for the mining industry, they come in; medicines come in, anything that will help us fight the spread of COVID, which is any hygienic products, any medical products or raw materials, which help us contain our production of sanitizers, contain our production of other tools, which help us fight COVID, they are coming in, we are getting. And essential goods, which we can’t get within Zambia, which we can’t produce within Zambia, whether they are edible goods, we are getting some, they are coming in slowly, but not at volumes and speed we used to receive them at,” said Yaluma.
“That’s why I am saying we have worked very well with the local Manufacturing Association and the Zambia Chamber of Commerce and Industry (ZACCI), we are always discussing, what is it that we can help so that they can increase local production and this is the time we should look at value addition to the abundant raw materials, which we have and are endowed with in this country. So, that’s why the Ministry of Finance also has come in to waive most of the prohibitive or restrictive taxes to those kinds of products. So, we are not getting what we…it’s not coming at the pace it used to run, but maintaining a flow of what we get should be available as essential goods to sustain the economy moving at a slow pace, but at the same time, improving the speed.”