Zimbabwe is expected to accrue significant benefits from its ongoing liberalisation of agricultural markets, Minister of Lands, Agriculture, Fisheries, Water and Rural Development Dr Anxious Masuka has said.
"By liberalising the markets, you have market forces at play, prices will find some equilibrium. We have now done structured market liberalisation
"This structured market liberalisation is identifying a few value chains and you begin to experiment with them in terms of where you want to get to; for example, we now have maize, we have wheat," said Dr Masuka in a speech at the African Continental Free Trade Area (A-ACX) Annual Conference in Victoria Falls yesterday,
He added: "In 2020, we said let us put in a policy that 40 percent of your raw materials requirements should be financed through value chain financing, while the Government provides the enabling environment.
"I have now challenged the colleagues that since this has worked so well, and we want by 2028 the six identified value chains for the private sector to be fully financing 100 percent of the raw material requirements, while the Government provides an enabling environment for this contracting arrangement to work."
Dr Masuka said Zimbabwe's development of a commodities exchange had come in handy, as the country was building capacity to export key commodities.
"For example, having attained wheat self-sufficiency three seasons ago, Zimbabwe now has an annual surplus of wheat of about 250 000 metric tonnes (MT), a surplus of 290 million kg of tobacco, surplus sugar and many horticultural products.
"As Africa still imports US$80 billion to US$100 billion worth of food annually, Zimbabwe is actively exploring the export opportunities brought about by the AfCFTA and ACX."
The Zimbabwe Mercantile Exchange (ZMX), is a smart partnership between the private sector and the Government, which has been operational for the past three years.
ZMX chief executive officer (CEO) Mr Collen Tapfumaneyi said the local commodities exchange was working to ensure that "the Zimbabwe agricultural sector is anchored on efficient, effective and convenient access to markets and finance by our hardworking farmers."
The Zimbabwe Mercantile Exchange (ZMX) is a founding member of the A-ACX.
The A-ACX is an alliance of commodity exchanges across Africa, which was established to foster collaboration and alignment with AfCFTA's broader goals of catalysing economic growth and promoting trade among African nations.
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Discussing building inclusive commodities exchanges, globally renowned agribusiness expert on agri-value chains and agri-exchanges Dr Bharat Kulkami, said inclusivity is a key aspect of commodity exchanges.
"Commodity exchanges are vital for efficient markets; inclusion ensures that marginalised groups, small-scale farmers and local traders all can participate.
He said that from previous examples, farmers have seen improvement in their incomes.
"In Ethiopia, before the commodity exchange started, farmers were getting 30 percent of their earnings, but after the implementation of commodity exchanges, 76 percent was going into farmers' pockets.
"Previously, farmers were paying a lot to third-party suppliers and middlemen."
Dr Kulkami, however, dispelled the myth that commodity exchanges completely cut out middlemen but rather realigns them to offer numerous services required by such exchanges.
A-ACX chairperson Ms Tucci Ivowi said there is a need for greater integration between African countries' commodities exchanges.
The AfCFTA is an unprecedented opportunity to transform trade; we know this, we have a market of over 1,3 billion people and a combined gross domestic product of over US$3 trillion.
"However, to fully realise this potential, we must scale and integrate our commodities exchanges, we must ensure seamless trade, price stability, and value creation across borders."
During the conference, the ZMX, which has been at the forefront of transforming the country's commodities market, highlighted its innovative frameworks to the other African delegates.
