The African Development Bank (AfDB) warned Zimbabwe over unfair foreign competition in light of a recent Economic Partnership Agreement (EPA) it signed with the EU (in addition to Mauritius, Seychelles, and Madagascar).
The agreement will see exports from the African nations that will have duty-free access to the EU markets. In return, the African countries will gradually open their markets to European goods over 15 years. The AfDB said that local industries could suffer from Western competition. Zimbabwe could lose $15.4 million in tariff revenue, but stands to gain $39.2 million in duties under the EU General Systems and Preferences.
“However, the opening up of domestic markets to European markets through the elimination of tariffs will expose local producers to competition from EU firms as their ability will be highly limited due to severe supply side constraints and also the country’s ability to use its tariff policy will be bound by the EPA,” AfDB said.
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