Good or bad, this country has been seen and heard in 2023. I think because we live here we forget that in the capitals of the rich world, be it London, Washington, Beijing or Tokyo, this messy country at the tip of Africa doesn’t ping the radar much.
However, in a month’s time we will be in the middle of another one of those moments when the spotlight will be on us. The African Growth & Opportunity Act (Agoa) Forum, attended by representatives of the US government and African governments, is meeting in Johannesburg and there’s a risk we’re going to play it all wrong.
The first problem is that we think too much of Agoa. It’s an important programme and losing access to it would certainly not be a happy outcome, especially for some motor companies. But as Absa pointed out last week it really wouldn’t be a train smash for our economy at large. The bank said as SA qualifies for significant relief under the World Trade Organisation’s most favoured nations regime, it “suggests limited benefit from Agoa’s tariff relief”.
This could be a moot point as there is a good chance we will continue in Agoa. However, this is where it gets tricky, because seeing as we’ve allowed a binary sense to develop that in terms of our relationship with the world’s biggest economy — it’s “Agoa or death” — there doesn’t appear to have been too much thought about what Agoa means to the Americans. It is their programme after all.
There is a risk that we will overplay our hand by failing to understand the power dynamics. People who have seen our Washington delegations in action (necessary because we don’t respect the US enough to have a functional embassy) tell me there’s an air of overconfidence that doesn’t quite match what we offer.
Our officials seem to think SA is a shoo-in for Agoa because this country is the gateway to the continent, the port of entry and departure for people and goods, and that as a result Agoa is essentially a non-viable programme without us. This arrogance will be familiar to some of our fellow Africans. Here goes SA again, proclaiming itself the boss of Africa. They don’t see it that way and have their own, healthier, relationships with the US.
Then, our people blame the Americans for the fact that Agoa needs to exist at all. All barriers to investment are on their side. They are protectionist, they are repatriating jobs, they are anti-China, they are extractive and ruthless, they engage in dumping. It’s all on them and they should fix it.
It illustrates a cultural gap in how SA and the US do democracy. An ANC minister who’s sat in the cabinet for aeons and is used to the centralised power gifted by three decades of political dominance is probably incapable of understanding the pressures on a US congressional representative. This individual will need to account for their decision to vote for SA’s renewed access to Agoa to a specific constituency of voters, and that’s the person you need to persuade, not a liberal technocrat in Washington.
So we should be selling it harder, and we can start by being honest. We need to drop the pretence that SA’s access to Agoa is driving regional development. Everyone knows that’s not quite true. Growth figures released by the IMF last week show quite clearly that SA is the sick man of Sub-Saharan Africa, and our railways and ports are — if anything — holding the rest of the region back.
In fact, the state of electricity, rail, ports and security are genuinely vexing problems for investors. Eskom has not been able to supply electricity reliably since 2008. According to the Centre for Risk Analysis, passenger rail journeys slumped 97% between 2008 and 2022. Transnet freighted 226-million tonnes of goods by train in 2017 and 154-million tonnes in 2022, despite a commodities boom. The US didn’t do this, the SA government did. We need to acknowledge it and point out that we are working on fixing it — and that there has been some success.
This is an important and clearly true counterpoint to the idea that there are only external factors stopping US companies from investing here without the Agoa carrot. If we can say yes, some of this is our own mess and as a friend and ally we’d appreciate the tailwind. When we’ve fixed Transnet this will indeed drive regional development, create opportunities for US companies and create better and stronger relationships between our countries. That’s easier to sell back home for US representatives than “you need us more than we need you”.
Lastly, we need to be prepared for some difficult conversations about what kind of conditions might be attached to a renewal. I wonder how much time has gone into really interrogating which US representatives are likely to be difficult, what their pain points are, and what their price might be. I can guarantee, with elections coming in November 2024, they have already thought about it good and hard.
In a way, I can’t wait for this to be over. Agoa has become unhelpfully totemic in our discourse about our relationship with the US. I hope it gets renewed, but once it’s done I’d far prefer we had detailed and difficult conversations with the Americans about bilateral trade — about cars, chicken, dairy, wine, gold, platinum group metals, iron and steel. There’s a sea of opportunity over there, and we just don’t seem to think terribly hard about it.
• Parker is Business Day editor-in-chief.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.