MUTARE Local companies have been urged to boost capacity utilisation to fully exploit opportunities presented by the launch of the Southern Africa free trade area (FTA).In an interview with The Zimbabwean, Zimbabwe Centre For Local Investment boss, David Chidawanyika, lauded the launch of the FTA as a giant step towards deep regional integration and called on Zimbabwean companies to find ways of fully exploiting opportunities presented.
We are urging companies to look at lowering the cost of production and the way to do this is through adopting toll manufacturing, he said. Toll manufacturing increases throughput and that will enhance our competitiveness enabling us to earn more foreign currency. The Southern African Development Community (SADC) launched the FTA recently, which will exempt 85 per cent of trade from tariffs.
A Customs Union, which is the next level after a free trade area, is expected to be established in 2010. Besides boosting trade, said Chidawanyika, the FTA is expected to boost investments opportunities and create jobs among other positives. Chidawanyika said the main challenge companies would face was reducing the cost of production for goods to be more competitive on the market.
He said the FTA provided an opportunity for Zimbabwean companies to do more business but added that it did not come without threats. Obviously, there is the threat of competition from within and outside SADC but I think we should view competition as an opportunity for us to improve, he said. He said Zimbabwe remained highly industrialized, giving the country an edge over others.
Chiadawanyika said the playing field was even for all SADC countries, adding that the customers would, at the end of the day, be ultimate beneficiaries of the FTA as goods would be available at higher quality and a cheaper price. He said SADC first mooted the idea of a free-trade zone in 1996 but progress has been slow and some economies continue to lag behind in developing infrastructure and policies, which are crucial for integration.
Some are still to join the FTA, which eliminates all tariff and non-tariff barriers. Zimbabwe is both a member of Comesa and Sadc, he said.
Post published in: Economy