Harare, 02 May 2023 – Leading financial services institution, Stanbic Bank Zimbabwe has urged Zimbabwean businesses to take advantage of the numerous benefits derived from the African Continental Free Trade Area (AfCFTA).
Stanbic Bank Head, Trade and Africa China Banking, Tapuwa Nyika said AfCFTA, presents numerous opportunities for Zimbabwean businesses to expand their market reach, improve competitiveness, and increase access to new markets.
Nyika said Zimbabwean business stand to benefit from the vast opportunities AfCFTA provides such as the creation of a single market; expected economic boost and trade diversity; collaborative structure and enforcement; eliminating tariffs; settling trade disputes and growing small and medium sized businesses.
“The removal of trade barriers opens the door for Zimbabwean businesses to access a market of over 1.2 billion consumers and expand their operations across the continent. The growth prospects for Zimbabwean businesses posed by this opportunity are immeasurable as they not only include employment creation but generation of the much needed foreign currency,” said Nyika.
Nyika said opening up of a single market brings competition adding that with increased competition, Zimbabwean businesses will be forced to improve their products and services, making them more competitive and appealing to a wider range of consumers.
He saidZimbabwean businesses can diversify their markets and reduce their dependence on a single market, reducing the risks associated with economic shocks.
“The AFCFTA is a significant step towards the integration of African economies, and Zimbabwean businesses have a unique opportunity to take advantage of this initiative. By embracing the opportunities presented by the agreement, Zimbabwean businesses can increase their market reach, improve competitiveness, and spur economic growth and development,” said Nyika.
Nyika’s sentiments are in tandem with Stanbic Bank’s parent Company, Standard Bank Group, which says AfCFTA presents a key opportunity for Africa to alleviate poverty, drive economic activity and achieve prosperity for her people.
Standard Bank Head of Trade for Business and Commercial Banking, Philip Myburgh speaking at the recently held AFTCA conference said, Africa’s largest bank by assets, is committed to driving her growth and unlocking opportunities across the 20 markets served.
In this regard, Standard Bank supports solutions that are Africa-centric and where the private sector plays a greater role in the health of local and regional economies. However, trade barriers and other protective internal policies remain stumbling blocks.
Recent global supply chain disruptions illustrate the urgent need of building domestic value chains integrated into regional and global supply ecosystems. Standard Bank is optimistic about the benefits of a single market and wants to harness its broad networks and expertise on-the-ground to play a key role in helping AfCFTA take off.
“Standard Bank is building the finance and trade solutions to help address the tariff and non-tariff barriers required to realise the continent’s ambitions to create an effective single market,” says Myburgh.
Beyond aligning legislation and reducing red-tape, a more conducive environment for trade includes developing the manufacturing capabilities to beneficiate products and produce finished goods. This includes the ability to manufacture and construct the rail, road and port infrastructure required to move goods between and across vast territories.
Beyond hard infrastructure, access to trade finance remains a challenge. While banks are important players in financing trade across the continent, perennial risks continue to limit commercial credit appetite.
“In this environment, leveraging the ability of Africa’s financial institutions to deploy capital from development finance institutions and sovereigns into effective trade finance, especially for entities that have not yet built up their credit standing, could dramatically expand intra-African trade,” says Myburgh.
Other areas where banks and the private sector could work with the AfCFTA to begin implementation in 2023, is to identify and then co-operate on leveraging growth in high-potential sectors.
“In Africa, for example, agriculture is the bedrock, biggest earner, and greatest employer in many markets. Starting with small steps to improve the movement of food and agricultural goods, inputs, services and people could have a disproportionally large positive impact on social stability, growth, investment and national revenue across the continent,” advises Myburgh.
Energy and power infrastructure is another area where even limited cross-border co-operation and co-ordinated national investment could have a disproportionally high impact on regional and continental growth.
Free trade or special economic zones have also, to date, proved their worth as drivers of investment, production, and export earnings amongst African economies.
Importantly for Africa, and critically for the AfCFTA vision of a single African market, the continent’s booming digital ability, supported by a youthful population, presents another avenue for Standard Bank to provide the finance, guidance and digital platforms and connectivity to grow Africa’s digital revolution into a global investment proposition,” says Myburgh.
A significant non-tariff barrier in Africa is access to information and in response, Standard Bank has developed the Africa Trade Barometer, which blends qualitative and quantitative data from, initially, 10 of Africa’s leading trade economies. It provides a near real-time view of trade openness, access to finance, macro-economic stability, infrastructure, foreign trade, governance, economic performance, and trade finance behaviour in Africa.
“The secret to Africa’s success will be the power of partnerships, awareness of what is needed and access to trusted information, as no one can do it alone. The AfCFTA Business Forum is the perfect opportunity to get these partnerships off the ground and working to breathe life into the move to a single market,” says Myburgh.
“It is important that we use this opportunity to accelerate moves to a practical cross-border framework on which to build the institutions, systems and practices capable of uniting Africa’s business potential into a continental force for growth,” concludes Myburgh.
The landmark trade agreement was signed by 54 African countries and is aimed at creating a single market for goods, services, and capital in Africa in Kigali, Rwanda in March 2018.
It came in force in January 2021 and is one of the best trade platforms for Zimbabwean businesses on the back of the numerous doors it opens.
The AFCFTA is a comprehensive agreement that covers trade in goods, trade in services, investment, intellectual property, and competition policy. It aims to remove barriers to trade, promote regional integration and stimulate economic growth and development across the continent.
The main objective of AFCTA is to increase intra-African trade, enhance competitiveness and spur economic growth. The agreement also aims to boost the flow of goods, services, capital and people across Africa, strengthening regional integration and promoting economic development.
The World bank estimates that the AFCFTA will increase Africa’s income by $450 billion by 2035 and increase intra-African exports by more than 81 %. The UN Economic Commission for Africa expects AFCFTA to enable the African economy to reach the US$29 trillion mark by 2050.
ENDS///
Caption: Stanbic Bank Head, Trade and Africa China Banking, Tapuwa Nyika
