Harare, (New Ziana) – Zimbabwe does not have to worry about potential revenue losses when the country starts implementing the Africa Continental Free Trade Area (AfCFTA) protocol, the Zimbabwe Revenue Authority (Zimra) has said.
The AfCFTA agreement came into force mid-last year, becoming the world’s largest free trade pact following its ratification by 24 member states.
The pact seeks to, among other things, create a single market for goods and services, free movement of people and eventually a Customs Union with a common tariff for Africa.
It is expected to create an African market of over 1.2 billion people with a Gross Domestic Product of $2.5 trillion.
Zimbabwe had initially asked for a waiver to implement the agreement after 15 years to give its economy time to prepare and re-industrialise following sanctions-induced hardships faced in the last two decades.
But President Emmerson Mnangagwa at the recently held African Union Summit said the country would immediately start implementing the agreement in the spirit of ensuring the continent achieves its objectives.
Zimra Commissioner General, Faith Mazanhi said while the country would
lose out on revenue as some goods will be coming in at no duty or reduced levels, it will still benefit through other indirect taxes.
“The revenues that are forgone in terms of import duties and taxes on inter-Africa trade will be replaced by other taxes such as indirect taxes and other domestic taxes,” she said at a tax review meeting.
“The overall impact of AfCFTA over the long term is expected to improve Africa’s economies as well as the health of businesses operating within the region.”
Zimra is the main funder of the government’s budget as Zimbabwe, unlike other African countries, is not getting any external budgetary support.
Mazanhi said the country needed to position its industries to be able
to complete in a wider African market if the economy is to benefit from implementing the continental trade protocol.
Zimbabwe, through ZIMRA and other stakeholders, had started to position
the country to take advantage of the AfCFTA by accelerating infrastructure development at our border posts, she said.
Government has also announced intentions to develop dry ports in Bulawayo, Makuti, Masvingo and Mutare.
“Initially, the dry ports will assist in decongesting our border posts, but ultimately they are meant to provide accessible markets of goods imported from Europe and Asia for our neighbouring countries up north,” she said.
Existing border posts including Beitbridge and Chirundu will be upgraded into one stop border borders to improve efficiency in facilitating trade Zimbabwe and its neighbours.