LETTER: SA needs all the help it can get, including from Agoa

Last week trade, industry and competition minister Ebrahim Patel raised the possibility that SA might be excluded from the Africa Growth and Opportunity Act (Agoa) on the grounds that the country has benefited enough from the act, as it is principally aimed at helping poor African nations. The minister was speculating about the argument that might be used by US legislators.

However, that is far from the reality SA faces. We have a 42.4% expanded unemployment rate, and we narrowly escaped a technical recession in the last quarter. Does that sound like a country that can afford to lose their preferential access to the biggest consumer market in the world?

Agoa does make provision for countries to graduate out of eligibility once they reach a sufficient level of development. Unfortunately, the pace of development across Africa has been so sluggish that only two countries have ever graduated out of Agoa eligibility, both of them by losing eligibility for the Generalised System of Preferences (GSP), which is a prerequisite to qualify for Agoa inclusion.

Seychelles managed to reach developed nation status by 2015, largely due to a robust financial sector, while Equatorial Guinea also reached an income level that saw it graduate in 2017.

SA is an upper-middle income country, and one that is not well on its way to high-income status. Other African countries at this income level include Mauritius, Botswana, Namibia and Gabon, which all benefit under Agoa. Clearly SA’s economic performance does not necessitate graduation out of the GSP or Agoa, and it would be a discretionary decision from the US.

That is why the trade lobbying efforts, like the recent US visit of Western Cape premier Alan Winde, are of the utmost importance. The fact of the matter is that our country still desperately needs all the help it can get when it comes to economic growth, and Agoa is still a key part of that.

Should we be excluded, there is a very real likelihood that our paltry to zero-growth economy will shrink even further. The effect on jobs in the Western Cape agriculture sector stands out, where the top five agricultural exports under Agoa have an effect on 136,000 related jobs.

The argument that SA has benefited “enough” under Agoa and is now in a position where it does not need it anymore, simply holds no water. It might in fact serve as a convenient excuse if one were trying to deflect the blame from the ANC’s support for Russia, which is far more likely to cost us our Agoa inclusion.

The minister might just be laying the groundwork for when his party’s loyalty to a war criminal costs thousands of South Africans their jobs.  

Cayla Murray
DA Western Cape finance, economic opportunities and tourism spokesperson

JOIN THE DISCUSSION: Send us an email with your comments to letters@businesslive.co.za. Letters of more than 300 words will be edited for length. Anonymous correspondence will not be published. Writers should include a daytime telephone number.