The Southern African Development Community (SADC) free trade area came into effect on 1 January. This means most goods produced in the region can now enter member countries free of custom duties.
The free trade area is an important milestone for the region and is the first step towards the establishment of a customs union by 2010, a common market by 2015 and economic and monetary union by 2018.
But big question marks hang over SADC’s ability to ease regional problem child Zimbabwe into the new set up.
One of the challenges is how to bring Zimbabwe’s tariff regimes in line with the rest of the SADC region.
Zimbabwe, in the eighth year of an economic crisis, has in recent years adopted a more protectionist approach to trade, which has seen the government charging imports such as clothing and passenger vehicles in foreign currency and taxing cross-border traders.
“We are going to interfere with agreed regional tariffs as long as things remain the way they are,” said respected Harare-based economist John Robertson.
Another challenge facing SADC will be how to bring Zimbabwe’s economic fundamentals in line with agreed regional targets two years from the launch of a customs union.
The regional economic targets include single-digit inflation and budget deficit for all member states by the end of 2008, a proposition that has proved to be a tall order for Zimbabwe.
“What we are likely to see is a more serious approach by SADC to assist Zimbabwe out of her economic crisis because they would not want any member state to be the stumbling block along the path to the envisaged customs union,” said a Harare-based investment analyst who could not be named for professional reasons.
The SADC Secretariat was last April tasked by the 14-member regional grouping to come up with an economic rescue package for Zimbabwe but has so far remained mum on the contents of its plan while conditions continue to deteriorate in Harare.
– ZimOnlinePost published in: News