Africa aiming to have Agoa renewed for 10 more years, says Ebrahim Patel

Trade, industry andcompetition minister Ebrahim Patel says South Africa is ready to roll out the red carpet for the US ahead of the 20th African Growth and Opportunity Act (Agoa) forum taking place in Nasrec, Johannesburg, next week.  

“What we are seeking to do is provide a platform in the discussion to reflect on the experience that the African continent and the US has had on Agoa, to look at how we can get more from the trade relationship by complementing Agoa with other measures and the common African position on Agoa, which is to have it renewed for an additional 10 years,” said Patel. 

Speaking to journalists on the state of readiness to host the forum on November 2-4, Patel said the gathering comes after a meeting President Cyril Ramaphosa held with his US counterpart, Joe Biden, at the White House in September last year.

This was followed by the leadership summit called by Biden in Washington in December, presidential envoys sent earlier this year and culminating in a meeting in July with the US administration and members of Congress. 

In September Ramaphosa hosted a round table with American businesses while Cosatu president Zingiswa Losi led a labour delegation to the US.  

“At the heart of the forum is going to be the discussion on the African Continental Free Trade ministers,  the administration and Congress, together with businesses and civil society voices.” 

Among the 2,000 delegates who will gather in Africa’s economic hub is a US delegation to be led by trade secretary ambassador Katherine Tai, together with members of Congress, business leaders, labour and civil society representatives and procurers from the US. 

Many African trade ministers are expected to attend.

“Agoa was first launched in 2000. It is an act of the US Congress and it provides preferential access for sub-Saharan countries to the US market and has always been time bound.” 

The latest agreement is due to expire in 2025.  

“Agoa is about a partnership by the US with 35 African countries. The forum we are hosting next week takes place in the context of Africa redefining its role in the world,” said Patel. 

Within the African Continental Free Trade Area, various governments have reduced the barriers to trade with African countries and boosted intra-regional trade. 

“The renewal of Agoa is about expanding value-added trade to the world’s biggest market.” 

Patel said South Africa had  agreed to host the forum in order to underline its economic relationship with the US. 

“It’s a vital relationship,” he said, adding that the US is a significant market for South African products. SA is the largest African exporter of goods to the US.

“The US is also important as an overall trading partner and as South Africa’s second-largest national trading partner. In turn, we are the biggest market for the American exports in sub-Saharan Africa. The American market is a tough one to get into and to stay in because companies around the world compete to get a part of the world’s biggest market - and the fact that we are succeeding is great,” said Patel. 

The countries have strong investment relations with each other, with two-way trade standing at $12bn. “It’s a mutually beneficial relationship. Africa and South Africa provide an enormous quantity of raw materials that fuel American industrialisation.” 

The relationship goes well beyond trade and investment, said Patel.   It includes political, technological and tourism partnerships.

Africa wants to see the rules around Agoa become more user-friendly. 

During the forum there will be discussions on the difficulties business has in accessing Agoa, how the two countries can develop joint export strategies, agriculture and food security, manufacturing, health products and diversifying global supply chains and the African Continental Free Trade Agreement, among others. 

“It’s a package in which we are rolling up our sleeves and getting down to how we can get more out of this economic relationship for the continent and the US.”

Cosatu president Zingiswa Losi said that for the first time organised labour will be included in the discussions. “Agoa has not just been important to South Africa’s industrial development but also to that of other African states.  

“We strongly believe that if South Africa were to exit from Agoa, it would not only be a devastating blow to local jobs in South Africa but also to those within the region and it will further add pressure to an already unmanageable migration flow to South Africa.” 

Losi said Cosatu fully supported the government’s efforts to extend SA’s membership in Agoa. 

Business for Unity South Africa's Cas Coovadia said Agoa leads to economic growth and job creation.  

“We are a country that is doing a lot of work to put us on a sustainable economic growth path, and in doing so we need to ensure that we establish relationships with critical partners all over the world.”  

Coovadia said it was important for business, labour and the government to have the same message to promote the extension of Agoa and for SA to remain a critical partner in Agoa. 

The deputy president of the Black Business Council, Gregory Mofokeng, said he was looking forward to discussions on how to scale up Agoa. 

“That should result in investments, which will benefit the economy broadly, create much-needed jobs and enable inclusive economic growth.”  

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