Meluleki Nzimande, Partner & Yael Shafrir, Associate Director, Webber Wentzel
South Africa will commence preferential trade under the Agreement Establishing the African Continental Free Trade Area (AfCFTA) on 31 January 2024. The United Nations Conference on Trade and Development (UNCTAD) predicts that the AfCFTA could boost intra-Africa trade by up to 33%.
South Africa will join the expanded AfCFTA Guided Trade Initiative (GTI), which provides an opportunity for countries to test commercially meaningful trade under the AfCFTA. The launch to mark this historic development will take place at the port of Durban, where African Ministers of Trade will meet and discuss the AfCFTA.
The Secretary-General of the AfCFTA Secretariat, the Minister of Trade, Industry and Competition of South Africa, Deputy Ministers of Trade, Industry and Competition, senior government officials and other politicians are expected to attend the launch, which will be officiated by President Cyril Ramaphosa.
This launch marks the first shipment of ‘made-in-South Africa’ products to AfCFTA State Parties participating in the GTI, such as Ghana, Egypt, Rwanda, and Tunisia.
Meluleki Nzimande, partner in Webber Wentzel’s Competition, Trade & Investment team said, “trade under the AfCFTA should see the prices of South African manufactured goods being more competitive in the African market, which bodes well for the growth of the local manufacturing sector and, by extension, local employment”.
The draft Government Gazettes published on 26 January 2024 (effective on 31 January 2024), state that South African businesses will be able to take advantage of trade under the liberalised preferences. As with other free trade agreements, there will be a phase-down period for most goods, which will allow the tariffs to be gradually reduced.
The length of the phase-down period will depend on whether a state party is classified as a ‘non-least or least developed country’.
“South Africa plays a critical role as a mature player in several prioritised value chains under the AfCFTA, in particular, automotive. This move is likely to change the dynamic of African and international trade, particularly as international players seek to identify new African hubs for their regional value chains to access a broader and growing market,” states, Yael Shafrir, Associate Director, Webber Wentzel Competition, Trade & Investment.
With South Africa officially joining the AfCFTA, a new era of economic growth and cooperation across the continent has gained further momentum.
This is the continuation of a journey towards a future of shared success and sustainable development for Africa.
ENDS
