Patrice Motsepe has called for an accelerated implementation of the African Continental Free Trade Agreement (AfCFTA) to boost economic growth on the continent.
Motsepe, founder and chair of JSE-listed African Rainbow Minerals, which has a capitalisation of almost R40bn, said it is vital that AfCFTA be rolled out with “extreme urgency” to ensure trade barriers across the continent are reduced.
AfCFTA, which came into effect in January 2021, is the world’s largest free-trade area, measured by the number of participating countries. A total 54 of the 55 AU member states have signed the agreement seeking to connect 1.2-billion people across the 55 countries that have a combined GDP of $3.4-trillion.
Speaking during a session of the Brics summit at the Sandton International Convention Centre on Tuesday, Motsepe, who was the inaugural chair of the Brics Business Council, SA chapter, in 2013, said: “We have to position ourselves as a country and continent that produces goods the Brics countries want. You can’t have a relationship based on aid, philanthropy and donations.”
In a one-on-one interview with The Nielsen Network CEO, Brownwyn Nielsen, Motsepe, based in Egypt as president of the Confederation of African Football since March 2021, said the future of the African continent depends on its capacity and ability to prove to rest of world that “we can conduct relationship partnerships to trade and investments and [maintain] relationships that are mutually beneficial”.
Despite socioeconomic challenges confronting the continent, including famine, slow economic growth, disease outbreaks and coups d’état, Motsepe said the “most exciting” thing is that intra-African trade has increased significantly over the years.
Export potential
In March, the UN Economic Commission For Africa said AfCFTA increased trade between countries in the region by 20% in 2022.
In the 2022 edition of the African Trade Report, the African Export-Import Bank (Afreximbank) states that Southern Africa’s export potential to the rest of Africa is estimated at about $23.1bn.
“The products with the greatest export potential are primarily industrial products and include machinery, electricity, motor vehicles and parts, metals, food products, plastics and rubber, beauty products, sugar, ferrous metals, chemicals, and metal products,” the report said.
“Collectively these products account for about 43% of the region’s total export potential. The dominance of SA’s economy — which accounts for more than 80% of the subregion’s total export potential — reflects the composition of intra-African trade, dominated by manufactured goods with content that is increasingly technological.”
Motsepe said the starting point for Africa, which he described as critically important, is a sense of urgency in ensuring trade barriers are removed. He added that SA companies are the largest trading partners on the African continent. “I go to Nigeria, Kenya, Egypt, Algeria, Morocco, Tanzania, I see SA companies there. Of course, I see [other] Brics companies as well.”
“We need a sense of urgency, sense of immediacy, with government and policymakers. We need to translate these good plans that we have, these big ideas, into effective, legislative or policy instruments that allow for effective flow of goods and services.”
No talkshops
He said opportunities are immense to grow trade and investment ties within the Brics countries, and called for a sense of urgency and a “pragmatic policy implementation” to realise the opportunities.
“We don’t have time for talkshops. That is why I seldom go to meetings, conferences ... this Brics partnership has to translate into quantifiable trade ideas.”
The Brics trade bloc consisting of Brazil, Russia, India, China and SA accounts for 42% of the world’s population, 27% of global GDP and about 20% of international trade.
The Brics economies accounted for about 21.3% of SA’s total trade with the world in 2022, of which China accounted for 67.6%, India 26.5%, Brazil 4.2% and Russia 1.7%, according to data from the Industrial Development Corporation.
SA’s overall trade with its Brics partners increased by an average 10% from 2017 to 2021.
International relations and co-operation minister Naledi Pandor said total SA trade with Brics reached R830bn in 2022 from R487bn in 2017. “Trade with China remains the dominant force but the share of other Brics partners also increased by 10% from 2021 to 2022,” Pandor said.
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