Zimbabwe Can Exploit AfCFTA Automotive Opportunities'

11 October 2024

The Herald (Harare)

By Michael Tome, Business Reporter

Zimbabwe is well positioned to exploit opportunities in Africa's automotive industry, taking advantage of favourable trade terms established under the African Continental Free Trade Area (AfCFTA), a Cabinet minister said.

Foreign Affairs and International Trade Minister, Dr Frederick Shava, said this while addressing participants at the Zimbabwe Economic Society and Friedrich-Ebert Stiftung organised a breakfast meeting in Harare yesterday.

The event was held under the theme "Perspectives on Opportunities and Challenges for Zimbabwe under the AfCFTA".

Minister Shava noted that the country was home to abundant key raw materials including lithium, needed in the automotive industry.

This, he said, gave Zimbabwe a competitive advantage across the continent's automotive sector.

Zimbabwe's lithium production has been increasing in recent years, with the Southern African country already the world's sixth-largest producer of the new energy mineral.

Active producers include Bikita Minerals, Prospect Zimbabwe's Arcadia Mine and Sabi Start. Several others, including Zulu Lithium, are at various stages of development.

Lithium is a key element in the production of electric vehicle batteries, a vital part of global efforts to reduce emissions that harm the environment.

Zimbabwe is also set to become a significant steel producer following the completion of the initial phase of the Manhize Steel Plant, near Mvuma.

Manhize's annual steel production capacity is expected to reach approximately 200 000 tonnes, including mild steel, reinforcing bars and structural steel.

This further places Zimbabwe as a major supplier of key raw materials used in the automotive industry.

The AfCFTA's secretariat and the African Association of Automotive Manufacturers (AAAM), have identified Chloride Zimbabwe, a battery manufacturing company, United Springs which is in spring manufacturing, Supreme Gaskets and Kabot Brothers, which makes vehicle load boxes and fuel tanks as significant players with the potential to immensely contribute towards the African automotive value chain.

"Currently, trends in the automotive sector reveal a high demand for electric vehicles.

"On the back of abundant mineral resources that are vital raw materials for the manufacture of electric vehicles, Zimbabwe is primed to play a significant role in the automotive value chain.

"For instance, Zimbabwe can be a hub for the manufacture of lithium and steel-related components, given the abundance of these minerals in the country

"Let me hasten to say that with the increase in intra-Africa trade, the AfCFTA unlocks opportunities for both local and global businesses to enter and expand into new markets, while consolidating their footprints in existing markets.

"Opportunities exist for Zimbabwean businesses to exploit in the African market, as well as attract Foreign Direct Investment in various sectors of the economy," said Minister Shava.

He said Zimbabwe was close to starting preferential trading under the AfCFTA, following the technical verification of the country's Provisional Schedules of Tariff Concession by the AfCFTA Secretariat.

Speaking at the same event, Zimbabwe Economic Society vice president, Dr Eddie Mahembe, said the Government, industrialists and the private sector in general should be forward-thinking and solidly prepare for the full implementation of the continental trade arrangement.

"We should focus on how we can position Zimbabwe to benefit from the AfCFTA, and also look at the bottlenecks. We should find out how we can do things better so that we can put our foot forward strongly, we look at quick wins and have greater impact.

"We should look at industries that can be helped quickly to stand up on their feet and be able to export, what are the industries which might take more time and give us greater impact," said Dr Mahembe.

Economic experts say Zimbabwe could easily be one of the first countries to benefit from the AfCFTA, given the robust potential in the manufacturing and mining sectors.

According to the World Bank, Zimbabwe has a strong competitive advantage in key areas, among them agriculture, mining, and tourism.

The lender says Zimbabwe is highly competitive in several value chains of agriculture and agribusiness industries, including sugar, cotton, horticulture, as well as meat and dairy.

Read the original article on The Herald.