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Africa: New Dawn for SA Trade With Africa

The 1st of January 2021 marked the start of South African firms trading under the African Continental Free Trade Agreement and with the United Kingdom under the Southern African Customs Union (SACU) Mozambique-UK Economic Partnership Agreement.

“South Africa has put in place the legal and administrative processes for preferential trade under the African Continental Free Trade Area (AfCFTA) on 1 January 2021, in line with the decision by the 13th Extra-Ordinary Session of the Assembly on the AfCFTA on 5 December 2020 to start trading under the AfCFTA. [This is] on the basis of legally implementable and reciprocal Tariff Schedules and Concessions, with agreed Rules of Origin,” said the Department of Trade, Industry and Competition (dtic).

The historic AfCFTA Agreement has been signed by 54 of the 55 African Union (AU) member States, and 34 countries have already deposited their instruments of ratification to the AU Commission and have become State Parties.

The current State Parties are Angola, Burkina Faso, Cameroon, Central African Republic, Chad, Côte d’Ivoire, Congo, Djibouti, Egypt, Eswatini, Ethiopia, Equatorial Guinea, Gabon, The Gambia, Ghana, Guinea, Kenya, Lesotho, Mali, Mauritania, Mauritius, Namibia, Niger, Nigeria, Rwanda, Saharawi Arab Democratic Republic, Sao Tome and Principe, Senegal, Sierra Leone, South Africa, Togo, Tunisia, Uganda and Zimbabwe.

A number of the signatory countries have begun to put the domestic administrative arrangements in place to enable trading under the new terms. These should be progressively expanded within the next few months.

In addition, trade for local firms with the UK commenced on 1 January under the new Economic Partnership Agreement between six southern African countries and the UK, replacing the European Union partnership terms for the UK market that were in place until 31 December 2020.

Meanwhile, dtic Minister Ebrahim Patel has called on South African farmers and manufacturers to gear up for the new opportunities in export markets.

“Trade with the rest of the continent is a critical source of output and jobs growth. African countries recognise that industrialisation is critical to the development of the continent. The new agreement will take some time to be fully operational but has the potential to be transformative for Africa, breaking our dependence on a neo-colonial pattern of trade that characterised trade.

“Our continent exports raw materials and imports finished goods, with substantial value added in the process,” said Patel.