The Eastern Cape stands out as a significant contributor to South Africa’s economic landscape, particularly in the realm of agriculture and automotive manufacturing. The province’s status as the country’s largest citrus producer and a major exporter of light vehicles underpins its economic importance. Additionally, being a substantial player in livestock, wool, and mohair production further solidifies its position, with more than 15-million kilograms of wool produced a year and supplying more than half of the world’s mohair.

South Africa’s current export markets are dominated by China, the United States, and Germany followed by Mozambique which presents an interesting dynamic, given its proximity to South Africa. There has been significant growth in exports to Mozambique $617 million in 1995 to $6.8 billion in 2023.

The limited intra-Africa trade has long been a challenge, considering that African countries trade with the rest of the world. However, the potential for exports lies within Africa’s growth, driven by its youthful population, in fact, according to the African Union, Africa has the youngest population in the world, with more than 400 million young people between the ages of 15 and 25 years.

The opportunity is augmented by the Africa Continental Free Trade Agreement (AfCFTA) which aims to unite African countries and eliminate trade barriers, fostering intra-Africa trade and encouraging value-added production. This has the potential to accelerate economic growth and attract investments within the continent.

The significant growth in exports to Mauritius (185% increase between 2017 and 2022) and the substantial goods exported to Rwanda in recent years exemplifies the positive impact of the AfCFTA. As a State Party to the AfCFTA Agreement, South Africa, with its substantial GDP, is poised to benefit.

The AfCFTA not only opens up new markets for South African exporters within Africa but also unlocks growth opportunities for the economy. The successful implementation of this agreement holds the promise of reciprocal market access, providing a mutually beneficial trade environment for African countries.

The readiness of twelve countries, including South Africa, to commence trade in a diverse range of products is a positive step. From food and beverages to steel products and household goods, the scope of potential trade under the AfCFTA is broad and promising. The eagerness of African countries to engage in trade and implement incentive plans further signals a shift towards fostering economic collaboration within the continent.

In conclusion, the AfCFTA represents a pivotal opportunity for South Africa to strengthen its position in intra-Africa trade, offering a path to economic growth and cooperation. The initiative not only aligns with the continent’s demographic advantage but also has the potential to reshape the economic landscape for the benefit of all participating nations.

Quintin Levey, Exporters Eastern Cape Chairman

The Herald – Let’s Talk Exports – Published March 2024