The African Continental Free Trade Agreement (AfCTA) provides a great opportunity for African countries to lift citizens of the continent out of poverty. This is according to the Chief Director of Trade and Invest Africa at the Department of Trade, Industry and Competition (the dtic) (TIA), Mr John Rocha.
He was speaking on the first day of a two-day South Africa-Ethiopia Trade and Investment Webinar. The event is held as part of efforts to increase bilateral trade and investment between South Africa and Ethiopia.
Rocha told the meeting that strengthening bilateral trade relations between South Africa and Ethiopia, was a critical step that would be mutually beneficial to both economies. He added that South Africa’s strategic relationship with Ethiopia rested on three pillars. These are industrialisation, infrastructure development and strengthening bilateral and Intra Africa Trade.
He adds that the AfCTA is a critical foundation upon which intra Africa trade must be built. He says it represents a major opportunity for African countries to boost growth, reduce poverty, and broaden economic inclusion.
“AfCTA has the potential to lift 30 million Africans out of extreme poverty and boost the incomes of nearly 68 million others who live on less than US$5.50 a day. It will boost Africa’s income by $450 billion by 2035 (a gain of 7 percent) while adding $76 billion to the income of the rest of the world. The agreement will increase Africa’s exports by $560 billion, mostly in manufacturing, it would spur larger wage gains for women (10.5 percent) than for men (9.9 percent) and boost wages for both skilled and unskilled workers—(10.3 percent for unskilled workers, and 9.8 percent for skilled workers).
Rocha highlighted that the value of South African exports to Ethiopia has decreased from R103 million in 2014 to a little over R90 million in 2019, while South Africa’s imports from Ethiopia dropped from R11 million to R10 million in the same period.
He added that exports to Ethiopia in 2019 showed that there was a demand and potential for exports expansion and investment in industrial and agriculture sector inputs, while South Africa`s imports from Ethiopia are dominated by agricultural products chief among these are coffee and spices.
A number of South African business participated in the session to learn more about investment opportunities in Africa’s second largest populous country. Ethiopia’s State Minister of Trade and Industry, Ambassador Misganu Arega, urged them to consider lucrative opportunities his country has on offer, insisting that his country is embarking on economic reforms and has put systems in place to guarantee ease of doing business for investors.
“Our current bilateral relationship with South Africa is excellent, but we believe more can be done to improve it for the benefit of our people. For two years now we’ve been engaged in implementing a massive economic reform programme, which we believe both countries can benefit from. Our efforts are anchored by a vision of building a prosperous nation and to create an economic environment that closes the income gap by creating opportunities and access to resource to all,” he added.
He described his country as place endowed with great diversity of plant, animal & microbial genetic resources and one of the fastest growing economies in the world with a 10% growth average over the past 14 years. He highlighted Textile and Apparel, Integrated Sugar industry, agroprocessing and pharmaceuticals as some of the priority sectors the country has identified for industrial development.
Enquiries:
Sidwell Medupe-Departmental Spokesperson
Tel: (012) 394 1650
Mobile: 079 492 1774
E-mail: MSMedupe@thedti.gov.za
Issued by: The Department of Trade, Industry and Competition
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