KZN HAS LAUNCHED THE AFRICAN CONTINENTAL FREE TRADE AREA (AFCFTA) OPPORTUNITIES

2021-05-26 04:01:00

26 May 2021- The MEC for Economic, Tourism  and Environmental Affairs, Mr Ravi Pillay launched the KwaZulu-Natal’s Africa Export Opportunities within the African Continental Free Trade Area (AfCFTA. The AfCFTA is a flagship project of Agenda 2063 of the African Union. The agreement will bring together all 55 member states of the African Union covering a market of more than 1.2 billion people, bringing together the world’s largest working-age population with a combined gross domestic product (GDP) of more than US$ 3.4 trillion.

Although postponed to 2021 due to the COVID-19 pandemic, the advent of the AfCFTA agreement further presents possibilities for cross-country trade and companies in the KZN region are encouraged to export directly or indirectly.

These opportunities captures the overall approach employed by Trade & Investment KwaZulu-Natal (TIKZN) in encouraging cross-border trade amongst businesses in KwaZulu-Natal, and specifically provides an overview of KZN’s export productive capacity, by broadly identifying the export base or potential products being exported to Africa.

 Neville Matjie, Chief Executive Officer at TIKZN outlined the benefits and the competitive advantages of the KZN exporters. These include among others the marketing and access, maintenance and technical support on technical products requiring regular maintenance. This can be offered effectively from South Africa , product suitability and many others. “South African products are usually compatible with other African market conditions. They are suited to the continent’s harsh climate; they are technically appropriate and can be easily maintained.” Said Matjie.

These export opportunities are presented by the AfCFTA agreement, and proposes a shared approach between TIKZN and KZN business community, whereby companies can directly or indirectly venture into “greenfield markets” or markets that have never been commercially exploited, with their existing matured products or less matured products; or enter existing African markets with new products (greenfield opportunity).

Ambassador of South Africa to the Arab Republic of Egypt, Ambassador Ntsiki Mashimbye highlighted on the growing interest from member countries who are not part of the African Union. “Let us rise and bring our fellow African countries up with us, and if we fail let us not fail for sake of not trying” said Mashimbye.

The rest of Africa presents tremendous opportunity to grow exports given the comparatively low logistics costs. Moreover, there is an opportunity to improve on existing potential from untapped markets in countries further up north of the continent, from the auspicious African Continental Free Trade Area (AfCFTA) agreement.

“Africa lags behind other regions of the world in terms of intra-regional trade. According to the African Development Bank (ADB), intra-Africa exports amount to only 16.6% of total trade. This compares very unfavourably to Europe where 60% of European trade happens amongst European countries, and within the ASEAN countries where it is over 30%. There is therefore much work that needs to be done in order to address this.” Said MEC Ravi Pillay.

He further added that the Africa we represent 17% of the global population but we only contribute 2% to global manufacturing while our share of global trade stands at 3%. This confirms the fact that our pattern of production and trade still subscribes to the template set long ago where we remain largely exporters of raw materials and importers of value-added products.

ENDS.
Contact Person: Ms Angel (Mkhethie) Shabangu
Cell: 076 062 3779/ 0764686139
Email: angel@tikzn.co.za
ISSUED BY TRADE & INVESTMENT KWAZULU-NATAL