The recent spate of xenophobic attacks on foreign nationals and foreign-owned businesses could have put SA in a defensive position in the ongoing negotiations of the African Continental Free Trade Agreement (AfCFTA), Wamkele Mene the country's former chief negotiator said on Thursday.
Mene was speaking at a panel discussion on the AfCFTA hosted by law firm Herbert Smith Freehills and Business Unity SA (Busa). The AfCTA, which became operational in July, promises to promote the free movement of goods and services across the continent and increase intra-Africa trade which currently sits at a very low 16%.
“It may place us in a defensive position in the negotiation room itself and send a signal that we are not committed to the integration of Africa,” said Mene.
“As a country we are going to have to work very hard to counter the likelihood of that,” he said.
This could however be addressed, he said, if SA took the lead on improving the ease of movement of business people across borders on the continent, by for example the introduction of a trade visa.
Global trade arrangements on services under the WTO, which SA is party to, already make provision for the movement of business people. SA can replicate this in the context of the AfCFTA to demonstrate its commitment to the continent, he said.
A large number of African economies were increasingly driven by services such as tourism and telecommunications, which relied on the ability of business people to travel more freely. “In the context of the [AfCFTA] agreement, like we have done in the WTO, this is something we will have to strongly consider and take a lead on,” he said
Recent violence has put strain on SA’s relationship with its continental counterparts, particularly the likes of Nigeria — one of Africa’s largest economies.
The issue of protection of foreigners and their businesses was also raised on Thursday in bilateral talks between two of the largest economies on the continent, SA and Nigeria.
President Cyril Ramaphosa met with his Nigerian counterpart Muhammadu Buhari who is in SA on a state visit. In a statement on Thursday the president recommitted to the work of the AfCFTA which he called a “once in a generation opportunity” to achieve the vision of a unified African economy.
The progress on the AfCFTA, which has been ratified by 27 African countries, also comes at a time when global trade tensions, driven by leaders in the developed world such as US president Donald Trump, has sparked concern that the world could see another global recession.
But panel members argued that what is increasingly perceived as an attack on global trade rules has provided greater momentum for Africa’s efforts on integration.
Catherine Grant Makokera, director for Tutwa Consulting, said that global events have provided more momentum for negotiations to go ahead, and that African leaders have confronted that issue and decided that Africa’s future lies in greater integration.
Though there were still challenges facing the implementation of the agreement, there was a core group of countries that have thrown their weight behind the concept of multilateralism, she said. From a “practical company point of view” the AfCFTA had to provide a “light of stability” for businesses trying to make long-term investment decisions.
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