Trade Barriers in Zimbabwe
"Recent data show that on average over the past decades, intra-African trade stands at about 10 to 12 percent. Compared with other world regions, Africa's trade performance inside its borders needs substantial improvement." (All Africa)
- One major problem for trade in Zimbabwe and other African countries, is the many roadblocks and customs checks that dot the country, slowing and complicating the path of delivery trucks and other transporters. If Zimbabwe were to invest in better, more effective customs, trade could be increased and accomplished more effectively.
- There has been a decrease in tariffs as a barrier to trade, but unfortunately, this has given way to an increase in non-tariff barriers. "The most prevalent NTBs hindering regional trade- include custom procedures, administrative requirements, technical standards and lack of physical infrastructure."(All Africa) These non-tariff barriers are just as damaging to trade as tariff barriers, and is a severe roadblock to effective trading systems that would enable Zimbabwe to become more self--reliant and access more international markets.
- Zimbabwe's main exports are all agricultural products, such as tobacco and grains. These goods are relatively elastic, which means a variation in price has a major impact on demand for that product. So even price of production increases, it will be difficult for producers to raise the price without losing a lot of consumers. This high price volatility of Zimbabwe's primary exports makes it difficult for the companies to plan ahead, and the investment in companies can lower.
- It is also difficult and expensive to import goods, and foreign investment in several sectors of the economy is capped. Zimbabwe's lack of recognition for the benefits of trade on an economy is a disappointing and damaging perspective that only helps to inhibit growth and development.
Trade Strategies
ESAP:
Zimbabwe launched a program in an effort to reduce poverty and unemployment, along with increasing trade with foreign countries, and making trade easier by liberalizing trading restrictions. The program: Economic and Structural Adjustment Program (ESAP), was supported by the world bank and was able to lift many of the controls stifling the country's economy, with regards to trade. It was put into place after Zimbabwe's economic crisis, during a terrible drought. The program "made impressive strides in trade and domestic regulatory policy"(WorldBank.org) however, "according to OED's recent audit,1/ the program did not reduce poverty and unemployment as its architects had hoped" (WorldBank.org) Additionally, while the program focused upon trade liberalization, it never outlined any specific actions to achieve this. While this program did make some gains in creating a less constricting trading environment, it was regarded unfavorably by much of the public, as it did little to relieve the economic stress the country was experiencing. Many of the citizens of Zimbabwe viewed the trade strategy as an escalator of the poverty in Zimbabwe. Recently, many economists and citizens view ESAP as one of the causes of the economic problems Zimbabwe has had.
ZIMPREST:
The Zimbabwe Programme for Economic and Structural Transformation was implemented after ESAP. It had similar goals, including better, sustainable, economic growth and development, along with decreased poverty and unemployment. However, this time the program was more aware of the potential contributions trade had to offer, especially in regards to globalization. This program was better at recognizing the impact of trade on a national economy, and the importance of trade with few barriers to impair it.
Zimbabwe launched a program in an effort to reduce poverty and unemployment, along with increasing trade with foreign countries, and making trade easier by liberalizing trading restrictions. The program: Economic and Structural Adjustment Program (ESAP), was supported by the world bank and was able to lift many of the controls stifling the country's economy, with regards to trade. It was put into place after Zimbabwe's economic crisis, during a terrible drought. The program "made impressive strides in trade and domestic regulatory policy"(WorldBank.org) however, "according to OED's recent audit,1/ the program did not reduce poverty and unemployment as its architects had hoped" (WorldBank.org) Additionally, while the program focused upon trade liberalization, it never outlined any specific actions to achieve this. While this program did make some gains in creating a less constricting trading environment, it was regarded unfavorably by much of the public, as it did little to relieve the economic stress the country was experiencing. Many of the citizens of Zimbabwe viewed the trade strategy as an escalator of the poverty in Zimbabwe. Recently, many economists and citizens view ESAP as one of the causes of the economic problems Zimbabwe has had.
ZIMPREST:
The Zimbabwe Programme for Economic and Structural Transformation was implemented after ESAP. It had similar goals, including better, sustainable, economic growth and development, along with decreased poverty and unemployment. However, this time the program was more aware of the potential contributions trade had to offer, especially in regards to globalization. This program was better at recognizing the impact of trade on a national economy, and the importance of trade with few barriers to impair it.