The process of trade liberalisation and market-oriented economic reforms was initiated in many developing countries in early 1980s; and it intensified in 1990s. In 1991, Zimbabwe was assisted by the IMF to implement trade-policy reforms under Economic Structural Adjustment Programme (ESAP). After adopting ESAP, the country witnessed soaring balance-of-payment problems, contraction of output, unemployment and the loss of government revenue. A number of factors, which were at play resulted in dismal economic performance under ESAP. These factors still exist, in addition to inter alia weak economic policies, structural rigidities and weak institutions. However, notwithstanding this controversy, the country continuously opened its economy under Common Market for Eastern and Southern Africa (COMESA), Southern Africa Development Community (SADC), World Trade Organisation (WTO), Economic Partnership Agreements (EPAs) and bilateral agreements. It is against this background that this study is undertaken, in order to evaluate the impact of different trade-policy regimes on trade, welfare and revenue in Zimbabwe. This study used two models: World Integrated Trade Solutions/Software for Market Analysis and Restrictions on Trade (WITS/SMART) and Tariff Reform Impact Simulation Tool (TRIST). The WITS/SMART model was used because of its ability in analysing the tariff effect of a single market on disaggregated product lines. The model also has the capability to analyse the effects of trade-policy reforms in the presence of imperfect substitutes. In order to complement the WITS/SMART model, a TRIST model was also used. The use of the TRIST model enabled the study to evaluate the impact of trade reforms on VAT, excise duties, collected and statutory revenue – which the WITS/SMART model had overlooked. Using the WITS/SMART model, the study considered seven trade-liberalisation frameworks for Zimbabwe: full implementation of the SADC free trade agreement (FTA), SADC common external tariff (CET), COMESA CET, COMESA FTA, EPAs, BFTAs and WTO FTA.

Submitted in fulfillment of the requirements of a Doctor of Technology: Business Administration Degree, Durban University of Technology, Durban, South Africa, 2014. / The study assesses the impact of trade and economic liberalisation policy reforms on the operations of selected manufacturing small to medium enterprises (SMEs) in Zimbabwe, and then compares the findings with experiences from South Africa’s SMEs. Motivation for the study was premised on two fronts. Zimbabwe and South Africa are currently faced with high unemployment rates (80% for Zimbabwe and 25% for South Africa). It therefore follows that job creation and poverty alleviation are the two pressing challenges facing the governments of Zimbabwe and South Africa. Secondly, the governments of Zimbabwe and South Africa have identified SMEs as the engines of economic growth with a special focus on addressing the twin challenges of unemployment and poverty alleviation. The roles and hopes bestowed on SMEs calls for a thriving and vibrant SME sector. On the other hand the adoption of trade liberalisation policies in the two countries has led some analysts to cast doubts on the ability of SMEs to withstand the fierce competition from established Multi-National Corporations and cheap imports. Employing a combined qualitative-quantitative approach, the study finds that trade and economic liberalisation policy had a negative impact on the operations of manufacturing small to medium enterprises in both Zimbabwe and South Africa. Cash-strapped SMEs have been strangled by resource-rich Multi-National Corporations. So dire is the situation that in the absence of significant government intervention, SMEs face an uncertain future. Compounding the matter is the fact that most SMEs in two countries are not involved in exports due to lack of knowledge and resources. The innovativeness ability of most SMEs remains very low. The study does not find significant differences on the impact of trade liberalisation policy reforms between SMEs in Zimbabwe and those in South Africa. It is recommended that the governments of Zimbabwe and South Africa need to introduce incentives to encourage SMEs to export and thus employ more people. Governments in Zimbabwe and South Africa need to factor in the transfer of technology to SMEs as one of the clauses when they negotiate the entry conditions of MNCs. In addition, the governments in Zimbabwe and South Africa must reintroduce tariffs in certain critical sectors of the economy to curtail cheap imports. It is cautioned that failure to protect SMEs could jeopardise the survival of most SMEs in Zimbabwe and South Africa, translating into increased unemployment, poverty and unequal wealth distribution.

Liberalisation of trade is deepening, and so have the incentive schemes put in place by a number of countries to promote it. International trade promotion agencies in developing countries are actively promoting their countries as the best, with which to trade. With international trade emerging as a favourite source of revenue and technology transfer for most countries, profound questions about the impact of trade liberalisation to economic growth are addressed in this study. The main purpose of this study is to empirically assess the relationship between trade liberalisation and economic growth in Zimbabwe using annual time series data from 1980 to 2017. Autoregressive distributed lag (ARDL) bounds testing approach to cointegration and Error Correction Mechanism (ECM) are applied in order to investigate the long run and short run impact of trade liberalisation on economic growth. The results proved the existence of a positive long-run relationship between trade liberalisation and economic growth. The study therefore concludes that policy makers and government negotiators in Zimbabwe should introduce policies that promote openness through the removal of barriers to trade and export promotion in order to promote overall growth of the economy. / Economics / M. Com (Economics)