Published: 28 August 2013

The African Development Bank says Zimbabwe should boost exports by taking advantage of the interim Economic Partnership Agreement with the European Union in order to reduce the trade deficit.

Zimbabwe's trade deficit has been widening as the import bill continues to grow while exports remain low.

In their monthly economic review statement, the AFDB said local companies could take advantage of the interim EPA to enjoy duty and quota free export into the EU for all products and boost exports.

The EPA with the EU was signed by four Southern Africa countries (Madagascar, Mauritius, Seychelles and Zimbabwe) in August 2009 and came into force in May 2012.

"The need to take advantage of the EPA stems from the fact that the EPA gives Zimbabwean firms an opportunity to explore the large EU market, which constitutes about 7 percent of the world population and generates about 25 percent of the world's gross domestic product," AFDB said.

In 2012 , statistics revealed that about 21 percent of the country's imports, constituting about US$ 1,6 billion, came from the EU countries while exports into the EU were only about 3 percent of the total exports, equivalent to about US$113 million.

This, according to AFDB, shows that there is a very high trade imbalance in the EU's favor, which can be reduced through increased exports.

However, the bank said although the EU markets presented great opportunities, there were challenges that needed to be overcome for local companies to secure the market.
- herald

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