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SA’s first shipment under AfCTFA hailed as the start of a new era

Home Business Management Finance & Investment SA’s first shipment under AfCTFA hailed as the start of a new...

SOUTH Africa’s president Cyril Ramaphosa officiated at the launch of the country’s first preferential trading shipment under the African Continental Free Trade Area (AfCFTA) at the Port of Durban last Wednesday, January 31.

The president signed the SARS products certification of origin flanked by minister of public enterprises Pravin Gordhan, Transnet acting group chief executive Michelle Phillips and SARS regional director Dan Zulu.

It is expected that the successful implementation of the AfCFTA will lead to diversification of exports, increased productive capacity, acceleration of growth, increased investment, increased employment opportunities and incomes and broaden economic inclusion both in South Africa and the rest of the continent. It provides South African exporters with new market access opportunities to key markets in Africa.

President Ramaphosa was joined by the minister of trade, industry and competition Ebrahim Patel, KwaZulu-Natal premier Nomusa Dube-Ncube,  AfCFTA secretary general Wamkele Mene and other AfCFTA council of ministers as the first shipment of South African products left the port on a vessel destined for Ghana.

Speaking at the event, president Ramaphosa said: “Over the last few years, our trade ministers have been finalising rules of origin of what constitutes an African product. They have done well to finalise 92 percent of the products that nations trade with each other. We need them to be even bolder in further rules of origin. The products that we trade among ourselves must truly be ‘Made in Africa’.

“The modalities for trade in goods have moved faster than for services. We therefore need to put more effort into building African champions in finance, retail and telecommunications, and in expanding tourism between African countries.

“That is the only way in which our economies will grow faster and sustainably.  The African Continental Free Trade Area creates the world’s largest free trade area by number of countries, and has the potential to bring transformative change and tremendous opportunities to African economies and businesses.

“The implementation of the African Continental Free Trade Area will accelerate the development of regional and local value chains, offering investors access to a population of 1.7 billion people with a fast-growing continental GDP.”

Ramaphosa said that industrial development is core to Africa’s integration. It builds Africa’s productive capacities, adds greater value to our products and diversifies trade beyond the traditional commodities.

He used the example of a value chain that is developing in the auto industry to illustrate how the potential of greater cross-border collaboration is being realised.

“South African automotive companies source leather car seats from a factory in Lesotho employing close to a thousand workers and wiring harnesses from Botswana at two plants employing several thousand workers. They source copper wire from Zambia, rubber from Cote d’Ivoire, Nigeria, Malawi, Ghana and Cameroon, and steering wheel components from Tunisia.

“These are installed in cars that are then exported from South Africa to other parts of the world. These inputs alone accounted for more than US$200 million worth of products traded among African countries and the scope to do more is available to us.

“But it requires bold rules of origin. For every one percent of extra African content, there is an opportunity for a factory or mine based on the continent to supply the products. And as the world moves to green industrialisation, Africa is well positioned to use our critical minerals to leverage industrialisation on the continent.

“The opportunities are vast: in food and beverages, in cars and trucks, in clothing and textiles. We have the capacity to produce more of our own pharmaceutical products and medical equipment.

“Investment can flow to the production of chemicals, machinery and equipment, household goods and many, many more.,” Ramaphosa said.

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