Posts

South Africa Sets Up National Committee for New African Trade Agreement Action Plans

South African Minister for Trade and Industry, Ebrahim Patel set up a National Committee, comprising business, labor and government, to develop action plans around the new African Continental Free Trade Agreement (AfCFTA).

This was done at a strategic session held between the Ministry and social partners at NEDLAC (the National Economic, Development and Labour Council, South Africa’s statutory social dialogue forum).

The engagement was chaired by Minister Patel, and was the first session held with the new Ministry at NEDLAC following the start of the Sixth Administration, and the combination of the dti and Economic Development Department into the new Department of Trade, Industry and Competition.

The day-long session gave rise to a number of tripartite working groups to speed-up actions to grow the number of jobs in the South African economy.

Both Business and Labour sent high level delegations to the engagement, including leaders from BUSA, CEOs of large companies and sector business organisations; as well as trade union leaders from COSATU, FEDUSA and NACTU.

Representatives of the Public Private Growth Initiative were also present in the meeting. The state was represented by Deputy Ministers of Trade and Industry, Fikile Majola and Nomalungelo Gina, senior officials from the new Department and a number of regulators, including SARS and ITAC. Minister Patel opened the all-day engagement by reflecting on the state of the economy.

“The South African economy produced R5 trillion worth of goods and services in the last year. We need to boost the size of that output and bring more people into the economy. There are currently 16,3 million people in employment in South Africa. We need to create more jobs, and better jobs for the 10 million South Africans who are willing and able to work but are unable to find employment. Neither despair nor blame constitute effective solutions. We have an opportunity to build on our real strengths as a nation, to turn the relatively modest job creation into a significantly larger effort, with workable and actionable solutions to unblock growth, investment and job creation in the economy,” he said.

The engagement focused on a number of key developments in the local and global economy, including the new Industrial Strategy outlined by President Cyril Ramaphosa during the State of the Nation Address in June, and the African Continental Free Trade Area (AfCFTA), which has been ratified now by 27 African countries, including South Africa.

The AfCFTA is intended to be implemented from July 2020, and has been recognize by all constituents as a game-changer for African economies, with the opportunity for new markets for South African goods, balanced by the risk that certain industries may come under threat from imports from across the continent.

The NEDALC parties agreed that a National Committee with sector-level task teams should identify which products South Africa could export to other African countries and what steps needed to be taken to realise such exports. The teams should also point to products that are vulnerable and develop measures to strengthen such sectors.

Government officials also provided updated presentations on South Africa’s export and investment promotion services, plans to improve the ease of doing business, development of special economic zones, changes to the Competition Act, empowerment and black industrialists programs, and the trade dimensions of the digital economy.

The engagement has now resulted in a number of working groups and committees, with constituents drawn from government, business and labor. These include a Ministerial Export Promotion Panel that will be constituted shortly, a Special Economic Zone reference team and a Working Committee on trade policy and the digital economy. Working groups are expected to meet during August and September.

Minister Patel commended social partners on their approach to the engagement, which he noted as solutions-driven.

“Partnership requires that every constituency brings concrete commitments by members to the table and also identifies what it seeks to achieve for its members. We need bold commitments from business and labor. Government will need to be more effective in creating the foundations for growth, transformation and development. This is an opportunity to do things differently. What we have seen in this dialogue begins to reset the tone for a collaborative approach to unlock inclusive growth and job creation in our country,” said Patel.

For more information about AfCFTA, visit the African Union’s website by clicking here.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], [2].

Operational Phase of the African Continental Free Trade Area Launches in Niger

The operational phase of the African Continental Free Trade Area, AfCFTA has been launched after a day-long summit of Heads of State and Government of the African Union (AU) in the Nigerien capital.

The AfCFTA will be governed by five operational instruments, i.e. the Rules of Origin; the online negotiating forum; the monitoring and elimination of non-tariff barriers; a digital payments system and the African Trade Observatory.

Each one was launched by different Heads of State and Government that included President Cyril Ramaphosa of South Africa, President Abdel Fattah El Sisi of Egypt who is current Chairperson of the AU; Mr. Moussa Faki Makamat, the Chairperson of the African Union Commission; and President Mahamadou Issoufou of Niger, who is the Champion of the AfCFTA.

The launch ceremony included “a roll call of honour”, at which the 27 countries that have ratified the instruments of the AfCFTA were announced, and those that have signed but not yet ratified were mentioned. A commemorative plaque of the signing was also unveiled.

The AfCFTA agreement was adopted and opened for signature on 21 March 2018 in Kigali. The AfCTA entered into force on 30 May 2019, thirty days after having received the twenty-second instrument of ratification on 29 April, 2019 in conformity with legal provisions.

“The speedy entry into force of the AfCFTA is a source of pride for all of us”, said AU Commission Chairperson Mr. Moussa Faki Mahamat. He described the free trade agreement as one of the instruments for continental integration in line with the objectives of the Abuja Treaty and the aspirations of Agenda 2063.

The Chairperson also highlighted the importance of peace building and security on the continent, adding that “it would be a delusion to talk of trade and development without peace and security”. He also stressed that, for the AfCFTA to be effective, there is need to open borders to other Africans. In this light, host President Mr. Mahamadou Issoufou, said the free trade area will tear down borders inherited from Africa’s colonial past and ensure full continental integration.

Egyptian President Abdel Fattah El Sisi stressed the need for the establishment of linkages with the private sector and the business and investment communities, while also calling for the involvement of the youth who will “continue the march” towards development.

The United Nations Deputy Secretary General Ms Amina Mohammed noted that the AfCFTA is a tool to drive growth and innovation for Africa, and to create opportunities for sustainable development and realizing Agenda 2063.

The AfCFTA will be one of the largest free trade areas since the formation of the World Trade Organisation, given Africa’s current population of 1.2 billion people, which is expected to grow to 2.5 billion by 2050.

Meanwhile Ghana has been confirmed by the Heads of State and Government as the host of the secretariat of the AfCFTA, having prevailed over six other countries that had also expressed interest in hosting it.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], [2].

Africa’s New Free Trade Deal Has Enough Signatories to Go Into Force

It is now official: Africa’s free trade agreement has drawn enough signatures to go into operation.

On Tuesday (Apr. 2), The Gambia’s parliament was the 22nd nation to ratify the agreement, the minimum threshold expected to approve the deal among the 55 member states of the African Union. The move posits a major step forward for the African Continental Free Trade Area (AfCFTA), which was created last March in Rwanda. The trade agreement is set to become operational within a month after the required number of endorsements are deposited with the AU chairperson’s office.

Once in place, the AfCFTA will cover a market of 1.2 billion people and a combined gross domestic product of $2.5 trillion—making it the world’s largest free trade area since the formation of the World Trade Organization seven decades ago. African leaders hope the agreement will eliminate current high tariffs, generate employment opportunities for a rapidly growing young workforce, and harmonize the work of already-existing regional economic communities. It could also enhance intra-African trade by 52.3% annually, according to the United Nations Economic Commission for Africa (UNECA).

“Posterity will recall this day,” the ex-president of the African Development Bank Donald Kaberuka wrote on Twitter. His sentiments were shared by the former executive secretary of UNECA Carlos Lopes who wrote, “Africa made it.” Lopes noted that it took the continent a year to operationalize the trade deal, “an absolute record for these type of agreements.”

Trade deals have a reputation for being slow and drawn-out affairs, with the European Union-Canada deal, for instance, taking seven years to negotiate after being 22 years in the making.

Yet not all is rosy with the historic free trade agreement. Africa’s largest economy Nigeria—along with Benin and Eritrea—is yet to sign the agreement, presumably due to pressure from trade and labor unions. Only 15 out of the 22 nations that have ratified the agreement have also submitted their ratification documents at the AU headquarters in Addis Ababa.

Private sector leaders have also expressed their concern about how the deal will be executed and if governments will be bold enough to move the deal forward. “The challenges are going to be in the implementation,” Naguib Sawiris, the executive chairman of the Egyptian investment holding Orascom said at the Africa CEO Forum in Kigali, Rwanda last week.

In a speech at the same conference, Rwandan president Paul Kagame said making sure AfCFTA succeeds represents “the very highest consequence for Africa’s future.” He acknowledged the role of politics and policy in driving countries and the continent forward, stating that he reached out to Nigerian president Muhammadu Buhari to sign the deal.

“Whatever we try to do, even in terms of economic development, the result comes back to the politics surrounding it,” he said. “If the politics is bad, everything else is bad. That is why open, responsive, and accountable governance is so critical.”

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email marketing@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], [2].