Cape Town - International Relations and Cooperation Minister Naledi Pandor on Thursday said South Africa must ensure that it is ready to take advantage of the potential offered by the African Continental Free Trade Area (AfCTA) which was recently agreed to during the 12th extraordinary session of the African Union (AU) in Ethiopia.
“We are very encouraged by the launch of the African Continental Free Trade Area Agreement. Now that it has come into force, an immense opportunity for trade within Africa has come in to being. South Africa must ensure that it is ready to take advantage of the potential offered by this expanded market access,” she said.
Pandor tabled her department's budget vote in Parliament on Thursday afternoon.
She said: “Once the agreement is fully operationalised, Africa will be one of the world’s largest single markets encompassing 55 countries or a population of 1.2 billion people and a combined Gross Domestic Product (GDP) of $3.2 trillion. The development of the necessary infrastructure for this expanded trade is going to gather speed and we, as South Africa, must be ready to play a key role.”
The free trade area agreement was agreed to last weekend during the 12th extraordinary session of the African Union (AU) in the Ethiopian capital Addis Ababa. SA President Cyril Ramaphosa said the agreement was a milestone that would fulfill a dream crafted by the founders of the Organisation of African Union 60 years ago when they conceptualised an integrated Africa.
The UN has pledged its full support for the development of the free trade area, claiming it would develop strategies to maximise opportunities created as member states begin to implement it.
Pandor said South Africa has excellent research universities that train a significant number of African postgraduate students and researchers and yet absorb only a small number of them.
“We also have a very competent research council as a country. Imagine the contribution we could make to our continent if we multiplied this capacity. Our capacity for innovation must become part of our diplomatic interactions and be utilised to advance our continent’s ambitions. We should promote the creation of hundreds of research institutes all over Africa and ensure they are supported to be innovative, productive and responsive. We have the capacity, let us use it strategically," she said.
She added that many African countries were achieving positive economic growth and developing social and economic infrastructure that expanded the likelihood of national development of higher growth levels and broad social development for all, although her department, as well as others, were facing a challenge of reduced budget allocations which had a severe impact on the ability to support government in reaching the country's national priorities.
“This year, we have been allocated less, and as well as with all other departments we are confronted by the limitations of our low economic growth and that is reduced budget allocations.
“We also, as the department, unusually faced the impact of currency fluctuations and rather inadequate provision for our compensation budget. Given these challenges, we have to use our resources wisely and strategically. The reduced budget severely impacts our ability to support government in reaching our national priorities. Fortunately, we have an excellent team in Dirco and we should do our best to execute our tasks,” Pandor said.