Ebrahim Patel, the minister of trade, industry & competition, is confident South Africa has demonstrated to the US that the continuation of the African Growth & Opportunity Act (Agoa) must include as many African countries as possible if it is to succeed.
“We were able to illustrate the connections between African countries, the way in which our supply chains are connected,” he said, in reference to the 20th Agoa Forum held in Johannesburg at the beginning of November.
“When we sell a vehicle to the US, it’s assembled in South Africa, but the rubber is grown in Côte d'Ivoire and Nigeria, the copper is mined in Zambia, the electrical harnesses that hold together the wiring are manufactured in Botswana, and the seat covers are manufactured in Lesotho. The steering wheel systems are developed in Tunisia.”
Ahead of the forum, the US announced plans to expel Uganda, Gabon, Niger and the Central Africa Republic from the pact that guarantees duty-free access to thousands of products from eligible African countries.
Patel was speaking to Business Times after months of troubles in the relationship between Washington and Pretoria over South Africa’s friendship with Russia and condemnation of Israel's actions in Gaza. Some members of the US Congress have campaigned for South Africa to be excluded from Agoa, arguing that its public stance on some major global issues was in conflict with US interests.
Tensions peaked when Reuben Brigety, the US ambassador, accused South Africa of loading arms onto the Lady R, a Russian vessel that docked in Simon’s Town nearly a year ago. An inquiry instituted by President Cyril Ramaphosa found no substance to the allegations.
But Patel said relations with the US have improved.
“Some months ago, the public characterisation of the relationship was that it was a bit distant, maybe even frosty. Now, broadly speaking, all commentators recognise that there is a strong warmth in the relationship,” he said.
If Agoa is extended for another 10 years, as African leaders at the summit urged it should be, Patel said there existed opportunities for small businesses and youth to participate more and gain access to the US market.
“People don’t always realise this, but South Africa has a big exposure in the US market. Close to R60bn with large companies like Sasol in Louisiana, and Sibanye in Montana. In fact, the biggest taxpayer in the state of Montana is a South African company, Sibanye, which does its mining operations there.
“It also helped us to demonstrate that the continent is more than just a consumer market and a source of raw materials. We were able to have more than 500 firms who showcased their products, from quite sophisticated products to very basic products, because they speak to a range of needs that consumers may have.
“It is in both the interest of the US and Sub-Saharan Africa that Agoa should continue for a further period. Now the discussion is how many additional years, should we have more products, how can we make it more friendly and accessible to smaller businesses and to youth-owned businesses?”
For more than two decades, and for hundreds of thousands of people across Sub-Saharan Africa, Agoa has meant new jobs, new skills, new connections, new investments. It’s meant less corruption and greater human and labour rights
— Anthony Blinken, US Secretary of State
Despite the Agoa Forum having passed off successfully, political threats to the extension of the programme and South Africa’s participation in it have not disappeared.
US senator Chris Coons, a Democrat, has drafted a bill calling for an immediate review of South Africa’s participation.
Anthony Blinken, the US Secretary of State, said President Joe Biden strongly supported efforts to reauthorise Agoa as more inclusive and sustainable growth will benefit the US, Africa, and the world.
“For more than two decades, and for hundreds of thousands of people across Sub-Saharan Africa, Agoa has meant new jobs, new skills, new connections, new investments. It’s meant less corruption and greater human and labour rights,” said Blinken.
Busisiwe Mavuso, CEO of Business Leadership South Africa, said there were opportunities to allow more entrepreneurs, including women-led businesses and SMEs [small and medium enterprises] to benefit from Agoa.
“They may need support to build their export capacity, but the market is waiting for them once they do. This is an under-exploited mechanism for small business development that those working to support small businesses should be exploring,” Mavuso said.
While South Africa’s continued eligibility for Agoa was uncertain, there were “positive indicators” at the forum that it will be on the list when it is published on January 1 next year, she added.
This week, the National Assembly voted in favour of closing Israel's embassy temporarily. However, that decision will not be acted upon unless Ramaphosa and the cabinet agree.
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