Government encourages SA businesses to market to Africa’s population
Johannesburg - Deputy trade, industry and economic development minister Fikile Majola this week encouraged South African businesses not to focus on serving the country’s population of 60 million but the continent’s 1.2 billion people.
Majola was addressing a webinar organised by the ANC’s Progressive Business Forum (PBF) on the African Continental Free Trade Area (AfCFTA).
”Every time we speak to South African businesses, especially emerging businesses, we say to them, when you work on your business strategy you must now remember that you are no longer focusing on a market on 60 million people but rather you are developing a strategy to focus on a market of 1.2 billion people,” he said.
According to Majola, this will require a shift of mindset that whatever South African companies do they will no longer be doing just for South Africa, but for the whole continent.
He promised that the government would produce an AfCFTA implementation plan during the current financial year.
”Each master plan will include an AfCFTA chapter, key sectors including auto, steel, poultry, sugar, agro-processing, clothing and manufacturing. Provinces and districts, using our district development model, will be assisted to identify both opportunities for firms in their areas and the local and provincial government contributions to realise their potential,” Majola said.
“We also aim to identify export champions that will support small, medium and micro enterprises and black industrialists to gear up for new markets,” he added.
Majola said the AfCFTA brings the continent a step closer to realising the historical vision of a reintegrated market and creating a basis for increasing inter-African trade.
He added that during the discussions of the AfCFTA, while Wamkele Mene, the secretary-general of its secretariat, was still the country’s chief negotiator, the biggest issue that worried South Africa was whether the continent did not see benefits in what was being built, if the initiative would not succeed.
”South Africans must appreciate that our growth is going to be with the rest of the continent,” said Majola.
Mene said 37 African countries ratified the agreement establishing the AfCFTA, the most recent being the Democratic Republic of the Congo last week.
The AfCFTA is waiting for 19 other countries to ratify and deposit their instruments of ratification.
“This will be the world’s largest free trade area after the World Trade Organisation,” said Mene.
He said the AfCFTA presents Africa with unique opportunities that in his view it will never have again if the continent does not make use of them as an instrument for integrating the market on the African continent.
”The character of the African economy is not positive, for the last 60 years it has not been positive. We continue to be an exporter of primary commodities, we continue to have national economies that are too small to make a dent in poverty alleviation, market fragmentation across regions, lack of economies of scale,” he said.
Mene added that “more importantly and very worryingly (Africa has) a shallow industrial capacity, a shallow productive and manufacturing capacity”.
According to Mene, the continent has a low percentage of intra-regional trade, which is between 16% and 18%, and the AfCFTA is the last opportunity to boost intra-African trade beyond this, diversify Africa’s economy, and position Africa as a market that can be globally competitive.
”Why should businesses pay attention to this? It is because for the first time we now offer an opportunity to scale, to expand the market and commercial presence beyond the Southern African Customs Union and the Southern African Development Community into new markets in east, west and north Africa and other regions of the continent,” he said.
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