Speech by Deputy Minister Alvin Botes on the Second Free State Investment Forum, 27 February 2024
Programme Director, MEC Meeko,
Premier of the Free State, Honourable Mxolisi Dukwana,
Minister of Electricity, Dr Ramokgopa,
Deputy Minister Kekana, Presidency,
Deputy Minister Gina, DTIC,
Deputy Minister Tshabalala, Water and Sanitation,
Members of the Executive Council,
Mangaung Executive Mayor Councillor Nthatsisi,
Members of the Diplomatic Corps,
Elected Representatives: Members of the Provincial Legislature and Councillors,
Representatives from the Business Community: Business Chambers and Business Associations,
South Africa executes its foreign policy within the rubric of four concentric circles of Pan-Africanism, Global Solidarity, Deepening Cooperation with the Industrialised North and Transformation of Global governance institutions to deepen multilateralism. Our Geopolitics finds itself in a transitional pathway from unipolarity to multipolarity, with a multiplicity of both state and non-state actors.
Economic diplomacy is a pivotal mechanism to respond to our national interest of mitigating the consequences of unemployment, poverty and inequality. South Africa is a key interlocutor in numerous economic development institutions, such as the BRICS PLUS, IBSA (India, Brazil and South Africa), G20, G77 PLUS China, Non-Aligned Movement, Indian Ocean Rim Association (IORA) and WTO.
The Free State Investment Conference should be mindful that South Africa’s industrialisation has historically been due to our proximity with the G7 nations; USA, UK, Germany and Japan are the top five trading partners, with the PRC bilaterally the biggest and India number eight; Botswana and Mozambique ranked number six and seven, respectively. Equally so, the conference should be knowledgeable that the Association of Southeast Asian Nations (ASEAN) presents new economic possibilities. Conference should take cognisance of the fact that two-way trade with Asia and the Middle East region grew from R45 billion in 1990 to a staggering R984 billion in 2020.
We are a substantive Pan Africanist state and we have championed the implementation of the African Continental Free Trade Area (AfCFTA), which is one of the flagship projects of Agenda 2063: The Africa We Want.
The AfCFTA commenced implementation on 1 January 2021 making considerable progress in fulfilling the vision of an integrated Continent of the founding fathers of the Organisation of the African Union (OAU), with particular reference to the Abuja protocol and Lagos Plan of Action. The AfCFTA is indeed a major achievement for the Continent and is seen by Africans and the international community as a ‘game changer’ and a catalyst for boosting intra-Africa trade, industrialisation and integration in the Continent.
The AfCFTA aims to build a single integrated African market of over 1 billion people with a combined GDP of approximately US$3.3 trillion. It also aims to boost intra-Africa trade which currently stands at approximately 16-18% and to increase Africa’s share of world trade which is estimated to be at only 3%. The AfCFTA is anchored on a developmental integration approach as set out in Agenda 2063 and places emphasis on market integration, infrastructure development, and industrial development to boost intra-Africa trade, support economic development and facilitate structural transformation in the continent. In support of these broad objectives, Phase I of the negotiations of the AfCFTA Agreement covers trade in both goods and services and Phase II includes Investment, Intellectual Property and Competition Policy.
To date, 54 AU member states have signed the AfCFTA, out of which 47 have ratified the Treaty, including South Africa. Eritrea is the only country that is yet to sign the AfCFTA. The Assembly of the Heads of State and Government of the AU that met on 17 and 18 February 2024, in Addis Ababa, in Ethiopia took the following decisions which will go a long way in accelerating the full implementation of the AfCFTA:
a) The Assembly adopted the AfCFTA Protocol on Women and Youth in Trade, which will facilitate active participation of the most vulnerable in the society, namely, women and youth.
b) The Assembly also adopted the AfCFTA Protocol on Digital Trade. The Protocol will ensure that the producers of the digital content and other digital applications from the Continent benefit from the AfCFTA.
c) Furthermore, the Assembly adopted and welcomed the finalisation of the AfCFTA Protocol on Investment, with emphasis on investment promotion, investment facilitation, and investment incentives.
The Heads of State and Government of the AU encouraged the Council of Ministers and technical negotiators of the AfCFTA to double their efforts towards the finalisation of all the outstanding issues including Rule of Origin on Textile and Automotive.
The Assembly congratulated South Africa for launching the first shipment under the AfCFTA regime on 31 January 2024. The first shipment went to Ghana and Kenya. South Africa joins other 8 countries that have started trading under the Guided Trade Initiative (GTI) of the AfCFTA. The Assembly encouraged other State Parties of the AfCFTA to join the GTI. Trade in Goods- 42 provisional schedules of tariff concessions have been verified and qualify to trade preferentially under the AfCFTA. Rules of Origin negotiated at 88,3% convergence- pending issues are automotive and textile/clothing. Auto and textiles are key sectors for Africa’s industrialisation. Concluding Rules of Origin on these sectors will be considerable progress towards value chain development and effective implementation of the AfCFTA. Trade in Services- Provisional Schedules of Tariff Concession (PSTC) 46 provisional schedules have been received including from 4 Customs Unions: East African Community (EAC), Economic Community of West African States (ECOWAS), Southern African Customs Union (SACU) and Economic and Monetary Union of Central African States (CEMAC) and 36 of these offers have been technically verified. The AfCFTA Phase II negotiations covering the protocols on Investment, Intellectual Property Rights and Competition Policy has been completed. Guided Trade Initiative begun in October 2022 matchmaking businesses and products for export and import between 9 State Parties (Cameroon, Egypt, Ghana, Kenya, Mauritius, Rwanda, South Africa, Tanzania and Tunisia) that have shown readiness and met the minimum requirements to start trading under the AfCFTA in coordination with their national AfCFTA implementation committees. Goods currently traded under the GTI include ceramic tiles, tea, coffee, processed meat products, corn starch, sugar, pasta, dried fruit, sisal fibre amongst others.
The main objective of the GTI is to practically test the efficacy of trading under AfCFTA preferences and identify the operational, institutional and legal challenges in order to improve. The Pan-African Payments and Settlement System (PAPSS) launched in Accra on 13 January 2021. The system is currently being piloted in the ECOWAS region.
The AfCFTA e-Tariff Book to ensure that tariff concession schedules are easily accessible to trade and customs authorities.
We should further welcome the Tariff Offer made by SACU countries comprising South Africa, Lesotho, Eswatini, Namibia and Botswana on 11 February 2023. This is a milestone development in the effective implementation of the AfCFTA, paving the way for South Africa and its neighbours to reduce tariffs by up to 90%, thereby facilitating the implementation of the AfCFTA. SACU’s tariff offer came at a crucial time as the AU had dedicated the AU theme for Year 2023, entitled: “Accelerating the AfCFTA Implementation.” Likewise, we further welcome the adoption of the Ministerial Regulations on Special Economic Zones (SEZs). The SEZ regulations will enable goods and products produced within SEZs to be treated in accordance with the rules of origin provisions of the AfCFTA.
Programme Director.
Allow me to conclude with a Pan African perspective by Kwame Nkrumah: “Countrymen, the task ahead is great indeed, and heavy is the responsibility; and yet it is a noble and glorious challenge – a challenge which calls for the courage to dream, the courage to believe, the courage to dare, the courage to do, the courage to envision, the courage to fight, the courage to work, the courage to achieve – to achieve the highest excellencies and the fullest greatness of man.
Dare we ask for more in life?”.
Programme Director,
We Remain Proud of Our Past and Confident about the Future.
I thank you.
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