South Africa: Look after trade relations, Chamber warns
South Africa should focus on attracting foreign investment and extending trade relations, the South African Chamber of Commerce & Industry (Sacci) said after business confidence fell to a year low.
An index compiled by the chamber showed average business confidence declined to 106.9 in May from 107.1 a month earlier. The latest figure is the lowest since May 2022, when global headwinds exacerbated by Russia’s war on Ukraine fuelled inflation and capital outflows.
“With a global economy that is slowly recovering, to perform optimally it is essential that due attention be paid to place South Africa back on a trajectory attracting foreign investment and extending lucrative trade relations,” Sacci said in a statement on Wednesday.
South Africa’s relations with the US, its second-biggest trading partner, and other Western allies have come into focus in the past year because of Pretoria’s stance on Russia. The country has angered the US by abstaining from UN resolutions condemning Russia’s invasion of Ukraine, and by hosting naval exercises with China and Russia.
Last month, a diplomatic row broke out when US ambassador Reuben Brigety accused South Africa of supplying weapons to Russia. Brigety implied that South Africa may lose its duty-free access to US markets, a prospect that sent the rand to a record low against the dollar before the two governments sought to smooth over the spat.
President Cyril Ramaphosa has denied the allegations about the weapons shipment and ordered an inquiry. Duty free trade between the US and South Africa was estimated at $23.3bn (about R425bn) last year. That compares with $850m of exports and imports between South Africa and Russia, according to IMF data.
South Africa has duty-free access to the world’s biggest economy under the African Growth & Opportunity Act (Agoa) and the so-called generalised system of preferences — last year it exported $2.7bn of goods under the programmes. Agoa expires in 2025 and US officials have previously said the qualifying criteria for beneficiaries could be revised or the programme replaced.
Earlier this week, four members of congress urged the Biden administration to relocate an Agoa event that’s scheduled to be hosted in South Africa in November. If the US and its allies in the EU decide to retaliate against South Africa over its Russia ties, the country may lose as much as $32.4bn in export revenue — almost a 10th of its GDP, according to Ndivhuho Netshitenzhe, an economist at Stanlib Asset Management, which has more than R650bn of assets under management.
“Threats of losing out on lucrative trade agreements may dent an important element of South Africa’s economic relationships and wellbeing. This calls for government to ease speculations and remove lingering uncertainties,” Sacci said.
Read related news articles
South Africa walks a tightrope on US relations
South Africa has been conducting a high-wire act in its relations with the United States (US). It is maintaining friendships with Washington’s enemies like Russia, Iran and China while trying to avoid disrupting its economic relations with America. Tensions came closer than ever to breaking point this month as the US House of Representatives’ Committee on Foreign Affairs passed the US-South Africa Bilateral Relations...
28 March 2024
Remarks by Deputy Treasury Secretary Adeyemo on the US-South Africa economic relationship
As Prepared for Delivery in Johannesburg, South Africa Thank you for the warm welcome. I want to express my gratitude to Consul General Spera and the American Chamber of Commerce for hosting me. I am honored to be joined today by South African Entrepreneurs that are building companies to unlock the economic potential of their country. I owe my own presence here today to the inspiration I drew from South Africa. In the middle of the...
13 March 2024
South African president Ramaphosa meets with US congressional delegation
South African President Cyril Ramaphosa today, 21 February 2024, received for a visit from a bipartisan congressional delegation from the United States of America, in Tuynhuys, Cape Town. The delegation is visiting South Africa at the invitation of the Aspen Institute. The President and the US congressional delegation discussed the importance of the relationship between South Africa and the US, which manifests in strong economic,...
21 February 2024
US congress receives Bill to review South Africa relations
A bill has been submitted to the United States congress calling for a full review of the country’s bilateral relationship with South Africa following the International Court of Justice ruling that found it plausible that Israel has committed acts of genocide against Gaza. The bipartisan bill which was introduced by US Republican congressman John James and Democratic Party congressman Jared Moskowitz this week could threaten South...
09 February 2024
Fitch research unit expects better AGOA deal for South Africa
Fitch’s research arm, BMI, believes SA has done enough to get improved trade terms under the African Growth & Opportunity Act (Agoa), which it expects to be extended and modified before its expiry in September 2025. But it warns that the deal might be stillborn if Donald Trump is elected US president. The research think-tank said in a note it assigns a 65% probability that Agoa will not only be renewed but modified to the benefit of...
09 January 2024
South Africa: BLSA CEO calls for more companies to leverage AGOA opportunities
Many more South African companies could benefit from the African Growth and Opportunity Act (AGOA), which gives eligible countries access to US markets free of tariff barriers, business organisation BusinessLeadership South Africa (BLSA) CEO Busi Mavuso writes in her weekly newsletter. Apart from mainstream formal sector businesses, there are opportunities to enable more entrepreneurs, including women-led...
20 November 2023
US ambassador: AGOA is an opportunity to deepen ties between the US and South Africa
President Joe Biden last December at the US-Africa Leaders Summit affirmed that the US will elevate its relationship with Africa. The future is Africa. One example is its youthful population: the median age on the continent is 19. By 2050, one in four people in the world will be in Africa. The US wants them to be healthy and wealthy. What happens in Africa will affect the rest of the globe — and we want to work together to ensure it is...
09 November 2023
US Senator Chris Coons proposes AGOA extension by 16 years, immediate review of SA’s AGOA eligibility
Powerful US Democratic Party Senator Chris Coons is circulating a discussion draft of a Bill to renew the African Growth and Opportunity Act (Agoa) for 16 years that would also require an immediate “out-of-cycle” review of South Africa’s eligibility for Agoa. That could lead to South Africa being removed next year from the programme, which has provided considerable benefits to SA exporters to the US of cars, fruits and wine, in...
07 November 2023
AGOA benefits extend beyond trade [incl. VIDEO of Friday's opening session]
Economies in Sub-Saharan countries stand to benefit far more from the African Growth and Opportunity Act (AGOA) than notable trade statistics, says President Cyril Ramaphosa. “AGOA enhances the diversification of African economies, enabling them to export value-added products. By enabling African countries to have preferential access to the US market, this opportunity incentivises African countries to develop and export value-added goods...
06 November 2023
South Africa pins its hopes on an early 2024 US Congress renewal of AGOA
South Africa’s government is hoping that the process to renew the African Growth and Opportunity Act (Agoa) by the US Congress will be concluded by early 2024, ensuring that more than 20 African countries continue to have duty-free access to the world’s largest economy. This is the first time that the South African government has given a timeline for when it hopes the US Congress might extend Agoa, which has been renewed twice...
05 November 2023
SA trade minister Patel expresses confidence at media briefing about South Africa’s continued inclusion in AGOA
Ahead of South Africa hosting the US-AfricaTrade and Economic Cooperation Forum – also called the AGOA Forum – from November 2 to 4, Trade, Industry and Competition Minister Ebrahim Patel on October 26 briefed the media on the state of readiness for the forum, expressing confidence that the South African government’s relations with the US were strong. Various South African stakeholders have been motivating for...
26 October 2023