Minister in the Presidency Khumbudzo Ntshavheni delivering a keynote address at the Black Business Council summit held at Radisson OR Tambo and Convention Centre in Kempton Park. Photo: GCIS
Minister in the Presidency Khumbudzo Ntshavheni has reiterated her defence of South Africa’s foreign policy in spite of potential withdrawal of economic benefits to the country.
Addressing the Black Business Council Summit, Ntshavheni yesterday said that the government’s non-alignment position on the Russia/Ukraine war had nothing to do with the possible withdrawal of South Africa from the African Growth and Opportunity Act (Agoa).
Ntshavheni said South Africa would maintain its international relations policy for the benefit of its interests.
“I want to set the record straight, that the largest trading partner of this country is Germany or the European Union followed by the US and then China. South Africa cannot be friends with people who want us to remain dependent and not support our growth,” Ntshavheni said.
“So our foreign relations policy is driven by our economic and national interests because for us the primary focus is South Africa. And the notion that our position of non-alignment is compromising our participation in Agoa is not true.”
Agoa is the US trade preference programme for Africa that allows hundreds of duty- and quota-free exports from eligible African countries into the US.
The agreement is due to expire in 2025 and there has been much speculation that it might be replaced with new trade agreements between the US and African countries that follow the free trade policies of the African Continental Free Trade Area agreement, as well as the reciprocal trade policies promoted by the US’s Prosper Africa initiative.
However, it has also been suggested that adherence to the strict statutory obligations of Agoa membership might continue to be implemented by the US as an effective governance tool, ensuring beneficiaries adhere to Agoa eligibility requirements for duty-free trade with the US.
Ntshavheni said the participation of South Africa in Agoa had always been a point of debate because the US had always argued that South Africa was no longer a developing country, but a developed country.
She said the statistics of inequality and levels of poverty continued to show that South Africa still had the largest elements of a developing country.
“The notification for reviewing the participation of South Africa in Agoa did not start last year with the conflict of Russia and Ukraine. The economic envoys of the president were running around to make sure that South Africa gets involved in that,” Ntshavheni said.
“It’s just that in South Africa we are what we call ‘megaphone diplomacy’ people, we are only interested in something when there is a crisis and we go with whoever shouts the loudest.
“And that is the position that puts us in a difficult position. I must also concede as a government communicator that last year we should have communicated better what informed our position so that we clarify as the country that bears the brunt of how we are treated globally.”
In May, US ambassador to South Africa Reuben Brigety caused a diplomatic row when he called a press conference and made unverified allegations that South Africa sold weapons to Russia.
These allegations sent shock waves through the financial markets and caused a rand collapse in early June at a time when the economy was most vulnerable.
The North West University (NWU) Business School’s Policy Uncertainty index released yesterday said though both South Africa and the US were seeking to reset their relationship, especially around Agoa, investment sentiment had, nonetheless, already been negatively affected.
The NWU said there was a heightened risk premium which investors now attached to South Africa, which was being repriced in new circumstances.
“If highly elevated policy uncertainty is allowed to become entrenched as a ‘new normal’, the danger is that South Africa will fail to eventually reach the 3% plus economic growth needed to alleviate high unemployment and poverty,” it said.
“The second half of 2023 should see South Africa expedite half-forged policies and projects that will help to reduce economic uncertainty, strengthen investor confidence and facilitate a policy environment that is solid, coherent and consistent. There remains potential to recover lost economic ground and rebuild confidence.”
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