In light of the immense competition for African markets, a continental free trade agreement could give South African traders a major advantage. According to Rob Davies, Minister of Trade and Industry, the African Continental Free Trade Area (AfCFTA) will yield significant benefit to countries on the continent. “As exporters, we need to be aware that there is immense competition for African markets – especially from our big cousin in Asia,” he said during a recent talk at the Exporters’ Club Western Cape. “We know that as more competitors enter the African landscape, opportunity is taken away from South African exporters and huge competition is created for our traders. At the same time we need to be aware that, as other African countries start to industrialise more, the idea that we can just supply them with finished goods, as has been the case in the past, is no longer feasible.” He said this would see South Africa in future moving towards becoming a trader of intermediate products rather than of finished goods. “Our aim with the agreements we are signing with African countries is that we should not get worse access to these markets than the Europeans or Asian countries, but rather something better.” He added this was the goal of the tariff schedule agreements that were currently being negotiated within AfCFTA. “As South Africa, we are talking with Egypt, we are speaking to Algeria. We have concluded agreements with Ghana and Nigeria. “When we will have agreements with the likes of Sudan and Djibouti or Niger, I don’t know.” Using Algeria as an example, Davies said South African exports had dropped significantly in recent months because the country had started its own auto industry. “But, thanks to our negotiations, we have managed to secure a deal where the auto kits will be manufactured in South Africa and assembled in Algeria. This will see the numbers increase again.”
