AfCFTA Agreement: South Africa Sends First Shipment To Other Countries

South Africa became the first country among the Southern African Customs Union (SACU) member nations to send its first shipment to other countries under the African Continental Free Trade Area (AfCFTA) agreement.

SACU member states consist of South Africa, Botswana, Lesotho, Namibia and Swaziland.

President Cyril Ramaphosa said on Wednesday that the products sent to other countries are made in Gauteng, Limpopo, North West, Free State, Mpumalanga and the Northern Cape and will be exported through the respective ports in these provinces.

Ramaphosa, who officiated the first shipment and preferential trading under the AfCFTA, noted that South Africa and other African countries will benefit from the start of preferential trade, which will create great opportunities for growth and development.

Furthermore, it will not only help South African producers but also boost traffic in sea ports, airports and land-based borders.

However, the president pointed out despite the recent growth in intra-African trade, it is still not big enough for international standards.

Intra-Africa exports within the African continent are around 16%, whereas Asia is at 55%, North America at 49% and the European Union at 63%. Ramaphosa noted that African countries trade with the rest of the world but trade within Africa is limited.

"The reason for this is clear: we are principally exporters of raw materials, selling rocks and black liquid to the world, instead of harnessing our oil and the minerals to industrialize our continent. We need to change this," the president said, SA News reported.

Ramaphosa said that African countries have a unique opportunity to bring millions of its citizens out of poverty by empowering women and young people to change the continent's business environment.

"That is why, as the South African government, we are focused on implementing our Freight Logistics Roadmap to improve the efficiency and competitiveness of the country's rail lines and ports," he said.

The government is also working closely with industry to fix Transnet's rail and port operations in the immediate term and to ensure greater investment in infrastructure into the future.

Meanwhile, the president emphasized that the products being exported from the continent must be truly "Made in Africa" and said the trade ministers have finalized 92% of the products that nations trade with each other.

Ramaphosa noted that South African automotive companies source leather car seats from Lesotho and wiring harnesses from Botswana, copper wire from Zambia. They also procure rubber from Cote d'Ivoire, Nigeria, Malawi, Ghana and Cameroon and steering wheel components from Tunisia. These are installed in cars that are then exported from South Africa to other parts of the world.

"These inputs alone accounted for more than $200 million worth of products traded among African countries and the scope to do more is available to us," the president stated.

"The modalities for trade in goods have moved faster than for services. We therefore need to put more effort into building African champions in finance, retail and telecommunications, and in expanding tourism between African countries. That is the only way in which our economies will grow faster and sustainably," Ramaphosa added.

Finance Minister Enoch Godongwana said last month that the AfCFTA agreement will provide opportunities for South African businesses to grow globally as well as partner with local companies.