Retailers body commends exchange rate stability; urges for scrutiny in joining AfCFTA

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By Alois Vinga

CONFEDERATION of Zimbabwe Retailers (CZR) has hailed the obtaining exchange rate stability amid calls for the government to exercise due scrutiny before fully committing to the Africa Continental Free Trade Areas (AfCFTA).

The remarks captured in the retailers’ organ as part of the 2023 National Budget input commends recent efforts and commitment exhibited by authorities in reigning in the economic instabilities which threatened to unwind exchange rate stability.

The CZR credited the measures for eradicating high speculative risk premiums which determined prices instability to the current situation where there is predictability of pricing.

“By bringing flexibility to the official foreign exchange rate, the gap between the parallel and official rate has now been closed, and more foreign currency activities have been channelled towards the formal value chains, which also reduced their reliance on the black market to buy foreign currency.

“The move by government to monitor and evaluate its suppliers also ensured that huge quantum of money is not offloaded on the black market, which also resulted in the parallel market rate falling,” said CZR.

The remarks come at a time when latest data from the Zimbabwe Statistics Agency (Zimstat) also indicates that annual inflation for the period of October 2022 declined from 280% to 268%, triggering expectations of anticipated inflation decline going into the future.

However, among other issues raised, the CZR made a clarion call for government to make strict considerations before fully committing to the AfCFTA – a free trade area bringing together countries on the continent.

Under the arrangement , AfCFTA members are committed to eliminating tariffs on most goods and services over a period of 5, 10, or 13 years, depending on the country’s level of development or the nature of the products.

But retailers believe that Zimbabwe needs to exercise extreme caution before full commitment to the trade organ.

“The challenge for Zimbabwe at the moment is that her economy is not prepared to fully tap into the opportunities that the AfCFTA offers. Firstly, the majority of its top exports are mineral and agricultural commodities that have a huge market or better prices outside Africa, including gold, nickel, chrome, tobacco and others.

“This is why some of our top export markets are UAE, China and Belgium. Therefore, for Zimbabwe to optimally tap into AfCFTA opportunities, it has to recalibrate its manufacturing architecture to come up with attractive products that have a key market in the African continent,” said CZR.