THERE is room to increase trade between Zimbabwe and the European Union (EU) as the current levels only represent a small percentage of Zimbabwe’s trade potential with the bloc, the EU has said.
In 2019, the country’s exports to the EU amounted to €364 million (US$425,6 million) and imported goods worth €151M (US$ 176 million), resulting in a positive trade balance for Zimbabwe of €213 million (US$250 million).
Speaking at the Zimbabwe Independent 2020 Quoted Companies Survey awards presentation, EU ambassador to Zimbabwe Timo Olkkonen revealed that the EU was continuing with its €100 million (US$117 million) support to Zimbabwean agriculture, including the promotion of value chains and also support to trade.
This includes taking advantage of the Eastern and Southern Africa-Economic Partnership Agreement (ESA-EPA) trade agreement it has with Zimbabwe, granting duty free and quota free exports to the European Single Market.
The ESA-EPA was signed by four countries — Madagascar, Mauritius, Seychelles and Zimbabwe — in August 2009 and is provisionally applied since May 14, 2012. It was also initialled but not signed by the Comoros and Zambia. In January 2013, the European Parliament gave its consent to the agreement.
The areas potentially covered by EPA go beyond trade in goods as they include services and investment, and trade-related areas such as sustainable development, competition, trade facilitation as well as further improvement in trade in goods and rules of origin. The interim EPA consolidates the duty free, quota-free market access which the EU offers to all exports from the four ESA States.
The ESA countries involved will gradually open their markets to EU exports over 15 years, with some exceptions for products that ESA countries consider sensitive
“In the area of trade facilitation, to mitigate the impact of Covid-19 on trading between the EU and its partners, electronic export certificates and scanned copies would be accepted for imports into the European Union, waiving the requirement to present original paper certificates as a temporary working solution in the context of Covid-19,” he said. “Currently, the parties to the agreement are negotiating to expand the scope of the arrangement, to cover other services. I would encourage the Zimbabwean private sector to make your voices heard, what you would like to see in that expanded agreement.”
Olkkonen said he was inspired by the resilience of the Zimbabwean private sector and how it manages to operate in often difficult circumstances. He alluded to the World Bank survey that showed that 89% of the firms who participated in the exercise said that they will rebound despite the devastating effects of Covid-19.
The survey carried out by the World Bank on the impact of Covid-19 pandemic on Zimbabwean firms revealed that Zimbabwe companies were impacted heavily by the Covid-19 through the suspension of operations, and disruption to supply and demand.
About 90% of surveyed firms had to suspend operations for a period of six to seven weeks, 86% experienced a decrease in demand and 79% suffered a disruption in the supply of raw materials.
“The financial impact was felt through the contraction in sales, liquidity and cash flow challenges including inability to pay creditors. Firms were forced to cut down on the number of employees and to reduce the number of working hours,” he said.
Without the private sector, Olkkonen said there cannot be true economic growth and no sustainable employment as the public sector relies on the private sector for generation of income and taxes. The Quoted Companies Survey awards presentation was held under the theme “Soaring above turmoil: Business Post Covid-19”. This year’s event was sponsored by Nedbank Zimbabwe.