Deputy Minister of Trade, Industry and Competition (Dtic), Fikile Majola, said it was imperative for South Africa to look beyond its borders to accomplish the task of inclusive economic growth and job creation in the wake of the Covid-19 pandemic.
During his address at the virtual Africa Day commemoration of the National Council of Provinces (NCOP), Majola said it was critical to move with speed towards building a strong foundation for Africa’s inclusive economic growth - and the African Continental Free Trade Area (AfCFTA) provided the platform to advance this core objective.
“The AfCFTA will create the largest free trade area in the world by number of countries participating and connect 1.3 billion people across 55 countries with a combined GDP valued at US$3.4 trillion. However, to make this a reality, significant policy reforms and trade facilitation measures are also necessary,” he said.
Majola said that one of the instructive lessons learned from the Covid-19 pandemic was that economic resilience and self-sufficiency were critical. He said given that many African countries did not have the means to cushion themselves against the resultant economic devastation, it was important to build up industrial capabilities, trade and supply chains across African countries.
“Our country accounts for approximately a quarter of intra-trade in the continent and will benefit massively from driving the consolidation of Africa’s integrated market. The creation of capacity to produce PPE in the fight against Covid-19 has also given South Africa the opportunity to become a supplier to the Sacu communities and broader African continent,” Majola said.
The importance of African trade in South Africa’s overall trade continues to grow. South Africa continues to record a large trade surplus with the rest of Africa, exporting mainly mineral products, machinery, chemicals and iron and steel products, which account for over 50% of its total exports to the rest of the continent.
South Africa’s exports into Africa grew from about R9 billion in 1994 to over R340 billion by 2019. Considering that in 2019 Africa imported about R8 trillion worth of goods, South Africa’s share of global exports into Africa is still relatively small. This is bound to change with the implementation of the AfCFTA.
Majola told the members of the NCOP that the continent’s full potential would remain unfulfilled unless efforts were made to address the challenges of poor infrastructure, small and fragmented markets, underdeveloped production structures and inadequate economic diversification.
-Dtic
