“Alternative sources of fiscal revenue are going to be difficult considering that Zimbabwe has a weak industrial base as well as high unemployment. In this regard, by signing full EPA’s, Zimbabwe is digging its own grave,” said Zimbabwe Coalition on Debt and Development (ZIMCODD) information officer, Richard Mambeva. ZIMCODD, is a socio-economic justice coalition established in February 2000 to facilitate citizens’ involvement in making public policy. Madagascar, Seychelles and Mauritius recently signed the EPA agreement, which would see signatories to the trade pact with Europe gradually open up their markets to European goods until 2023.
However, ZIMCODD said the revival of local industries might also be delayed or fail to take place as the signing of the EPA would see many fail in the face of stiff competition. ZIMCODD said the local industry, smarting from the effects of almost a decade of economic instability, does not have the technology, equipment and financial sophistication to withstand competition from EU products. Antiquated, obsolete machinery and old production systems and business models mean production costs for local goods will remain high and the products could face stiff competition from the EU, ZIMCODD warned.
“We have witnessed what happened to the cross border traders especially in the clothing industry and footwear when the Chinese entered Zimbabwe. Most of the companies went out of business and even small scale traders closed their shops leading to massive unemployment. Poor infrastructure in Zimbabwe results in high cost of doing business for traders and this reduces productivity and this will result in local industries not being able to produce in time to compete with the EU,” the ZDD programs officer indicated. 39 countries have so far signed “interim” EPAs covering trade in goods, but countries like Senegal and South Africa have refused to sign the agreement.
Post published in: News