Malawi, Zimbabwe to simplify trade rules

Trade between Zimbabwe and Malawi is expected to increase following the implementation of the Common Market for Eastern and Southern Africa Simplified Trade Regime by the two countries.

The initiative aimed at formalising and facilitating informal cross-border trade is effective from December 1, 2011.

In a joint statement, the Government of Zimbabwe and Comesa said the programme enables traders to benefit from the Comesa Free Trade Area arrangement. Cross-border traders would be allowed a value threshold of US$1 000 per consignment.

"This means that any individual trader with goods or products on the eligible list valued at not more than US$1 000 and the Comesa Simplified Customs Document automatically qualifies for duty- and quota-free entry," said part of the joint statement.

STR is an initiative by Comesa to facilitate trade and reduce poverty by recognising that informal trading, particularly cross-border trade, is an important source of employment.

The initiative is expected to improve the relationship between traders and customs officials at the border, thereby encouraging more small-scale traders to come through the border points than before.

Customs authorities in both countries expect the STR to help increase revenue collection from small traders that would otherwise avoid the borders.

As for the small traders, they now have the opportunity to use a simplified certificate of origin, which allows them not to pay import duties for goods that are wholly manufactured or originating from the Comesa region.

According to the arrangement, goods imported or exported are expected to comply with the normal food safety, plant and animal health regulations including environmental protection.

Six countries have already implemented the Simplified Trade Regime. Zimbabwe and Zambia have already implemented the programme.

Indications are that most cross-border traders are not aware of these facilities and it has not been fully exploited.

Trade between the two countries has been minimal with Zimbabweans importing rice from Malawi. In the region the country's trade is more inclined towards South Africa and Zambia.

Goods manufactured in Zimbabwe are on demand in the region and with increased production locally cross-border trade are likely to increase volumes.

Cross-border trading has emerged a major source of employment for most Zimbabweans and it has proved to be a profitable venture.

With the implementation of the STR more business volumes are likely to be recorded.

Zimbabwe's pace for employment generation has remained low, notwithstanding annual average growth rates of 3-5 percent attained in the 1990s and the strong recovery from 2009 with rates around 8 percent.

The Herald