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SA to urge US to extend Africa growth act

Cape Town – South Africa will be driving home the message that Africa is the next frontier of economic investment and that it needs an extension of the African Growth and Opportunity Act (Agoa) at the inaugural US-Africa leaders’ summit, Trade and Industry Minister Rob Davies said on Monday.

President Jacob Zuma will lead a delegation to the first US-Africa leaders’ summit in Washington from August 4-6, something US President Barack Obama promised when he visited three African countries last year.

Davies said he will also participate in the crucial Agoa forum on the margins of the summit.

15 more years

“We believe that Agoa has been a useful platform... and we are calling for an extension for 15 years,” he told reporters in Pretoria and through a live feed in Cape Town. “Fifteen years will allow certainty for investment.”

“The African continent is growing and it is industrialising and there are amazing infrastructure development programmes,” Davies told the media.

Davies said South Africa believed extending the Agoa would be mutually beneficial. Last year total trade between South Africa and the US was R130 billion, which was reasonably balanced, he said. There were also around 600 US companies active in South Africa. “We have measured that 100 000 jobs were created in the US that can be attributable to Agoa,” he said.

The final decision to renew the Agoa was a US Congress decision, but Obama is expected to endorse the extension. “We expect him to announce his support of Agoa for another 15 years without any new conditionality or graduation of any country,” Davies sad. “Agoa has huge advantages... it builds goodwill.”

What is Agoa
African Growth and Opportunity Act The Agoa is a non-reciprocal preferential scheme, which applies only to US imports from eligible sub-Saharan African countries, of which South Africa is one.

“Agoa is the cornerstone of bilateral relations between the US and Sub-Saharan Africa (SSA), as it provides the sole platform between the US and SSA to discuss ways and means to deepen trade and investment relations,” he said. “Our central message is that Agoa is significant to the regional integration efforts in in Africa.”

“For us, Agoa is the only legal framework between the SSA and the US and … by endorsing the extension of Agoa the US will be promoting our continental developmental integration, industrialisation and infrastructure development.”

Listen to Rob Davies



Round Table


While Davies was explaining South Africa’s message for the summit, the University of Cape Town Graduate School of Business held roundtable discussions on the subject on Monday.

US Consular General Erica J Barks-Ruggles engaged with stakeholders in trade relations, discussing how Agoa would assist. Lesotho National Development Corporation CEO Joshua Setipa said he hoped the summit would discuss ways of assisting small farmers in Africa and assist in developing innovative financing programmes to ensure they are sustainable.

“We need more predictability,” he said, referring to the fact that US congress can pull out of the Agoa agreement at any point, causing a sense of instability. “We cherish Agoa, but it could use some refinement. It could be more in line with Africa’s priorities of regional integration.”

An example was given by Craig Garrow of Pronto Clearing about how Agoa assists with Cape Town’s boat making industry and its trade relations with the US. “We are the world’s biggest manufacturer of catamarans and we are good for job creation,” he said. He warned of the impact of not having Agoa in place, showing how tariffs would impact on the business.

Ford's Shibishi Maruatona said Africa and Brics nations offered the US new opportunities in the post-recession environment. “South Africa’s black middle class has grown from 300 000 to four million in decade, which is very interesting to note,” he said.

“Business here needs the conviction to keep its strategy and integrity in place and the Agoa would assist with that process.”

- Fin24 and Sapa.


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