AfCFTA holds opportunities for South African industry

20th May 2022

By: Tasneem Bulbulia

Senior Contributing Editor Online


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With progress being made on negotiations for the implementation of the African Continental Free Trade Area (AfCFTA), South Africa’s steel industry could capitalise on opportunities emanating from the AfCFTA agreement, once it is implemented.

Tralac Trade Law Centre executive director Trudi Hartzenberg told delegates attending the Mainstreaming the Steel Master Plan Conference on May 20 that 43 African States that have signed the AfCFTA agreement have now ratified it.

She clarified, however, that this did not mean that trade could start under the agreement immediately, given that there were some outstanding issues that needed to be resolved first.

Trade would continue within the continent under agreements that were already in place, and once AfCFTA becomes operational, would run parallel to these.

However, once AfCFTA was fully implemented, this would change the dynamics in terms of how countries like South Africa traded with other important economies on the continent, such as Egypt and Nigeria, Hartzenberg outlined.

She also noted that there would be distinct benefits for South African producers.

Hartzenberg outlined that there was considerable scope to improve the country’s steel export performance on the continent.

Department of Trade, Industry and Competition Trade Invest Africa chief director John Rocha, meanwhile, said there were several opportunities for the steel industry to capitalise on in terms of AfCFTA.

Firstly, he said, nearly 60% of the continent’s steel was imported, which demonstrated that there was an opportunity to leverage AfCFTA to have countries procure steel from producers  like South Africa and Egypt instead.

The steel master plan includes efforts to address issues of competitiveness, Rocha said, which would assist in this as well.

He outlined that there was definite demand for steel on the continent, even though this was scattered and concentrated, with South African and sub–Saharan African being the biggest consumers.

Therefore, Rocha said the AfCFTA must be leveraged to enable more trade within the continent, especially in this region.

Also, he said there needed to be specifications around standards, to ensure there were no issues when tariff barriers were removed or harmonised under AfCFTA.

Moreover, Rocha said that there was an opportunity in the growth of cargo freight trade, which is set to grow exponentially by 2030.

Here, he said, a shift to rail from road must be pursued, as railway infrastructure development gives rise to the necessary increased demand for steel.

Also, Rocha pointed out that there was a considerable gap of railway infrastructure on the continent, which needed to be developed for the AfCFTA to be implemented successfully.

He called for private sector participation in bolstering this infrastructure, with government finances not sufficient to fund the necessary investment, and therefore, this always lagging behind.

Rocha also said the Trade Invest Africa initiative had identified a portfolio of projects with considerable value, with the main sectors for these being construction, transport which includes railways, and the energy sector.

Therefore, he said, it now needed to work more closely with the steel industry as a collective, rather than with individual companies in the sector.

Through this, he said, the initiative could share requisite information with the sector in terms of these projects and provide guidance as to which markets in Africa it could target, and could also assist in leveraging bilateral agreements to secure opportunities for the steel sector.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online




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