Latest news with #Agoa
Daily Maverick
a day ago
- Business
- Daily Maverick
After the Bell: Who's afraid of losing Agoa?
One of the great risks of the debate around Agoa is that it gives us something else to blame, when we should blame ourselves for our poor economy. And we must remember that it is not true that there is no cost to us from Agoa. One of the most boring discussions I've heard around our economy over the past five years has been posed as 'will we keep Agoa?' I hear it everywhere, even now, when US President Donald Trump has made it clear that he wants to tear up the entire trade rule book. I can understand why we keep hearing about it. There are certain sections of our economy that really benefit from it. Because of Agoa (the African Growth and Opportunity Act), they have been able to grow and employ people. And some of the arguments they can make about why Agoa matters to us are important. Free market access to the US is great for the car industry, and for our farmers. It means they are exporting goods produced here, earning dollars in return and basically importing jobs. People are employed, their kids are kept in good schools. You could argue that the entire community around Daily Maverick journalist Estelle Ellis and the rest of the Baywatch team will be badly hit if it all comes to an end. And that would be true. Farmers, too, had a bumper season exporting to the US in the first quarter of the year. They were able to increase the amount of goods they sent there dramatically in that quarter. When I first heard that, I thought, perhaps, like the Chinese (and I'm sure others), they had been rushing goods into US ports before new tariffs could come into effect. But that amazing agricultural economics guru Wandile Sihlobo told me on The Money Show on Monday night that this is not the case. It happened because our farmers have created a strong demand for their goods. And, like our car industry, we are basically importing jobs. But we should be aware that, despite these very loud and important voices in our national debate, this is not the end of the story. The Brookings Institute estimated nearly 18 months ago that 'In total, a loss of Agoa benefits would lead to a GDP decline of just 0.06%'. To put that into context, our GDP grew by just 0.1% in the first quarter of this year. At the same time, the South African Reserve Bank has generally said that load shedding was costing our GDP 2% every year. So it may matter, but only in the context of our complete inability to take action to grow our own economy. One of the great risks of this debate around Agoa is that it gives us something else to blame, when we should blame ourselves for our poor economy. And we must remember that it is not true that there is no cost to us from Agoa. In fact, a few weeks ago I was almost taken aback when an American investor (one of those wonderful people who travels the world, and is hugely interested and fascinated by it) asked me point-blank: 'Why do you all care so much about Agoa?' He even suggested that actually it went against our interests. This is because of some of the small print. If you look at the text of the Act that passed through the US Congress, the conditions of eligibility are designed to literally create African economies in the US mould. Of course, as we were so often reminded during the Lady R saga, it says that you must 'not engage in activities that undermine United States national security or foreign policy interests'. This is a wonderful stick for the US to beat us with. If it wants, it could define our opposition to Israel's genocidal war on the people of Gaza as 'undermining' US 'foreign policy interests'. To be clear, there is much in Agoa that is good. It mentions that workers must be protected, that there should be political freedom and things like that. But it is still a tool of foreign policy. Yes, Agoa is helping African countries to develop. But it is also a useful instrument of control. Agoa looks finished anyway. In reality, the US system of government appears to be giving Trump whatever he wants. So far, very few Republicans have spoken against his tariff policies. But the markets are speaking. And the fact that the bond markets have forced Trump to basically chicken out has given us the wonderful phrase Taco (Trump always chickens out). So, I do think we need to be less afraid of him. He is slowly being revealed as all bark and very little bite. What we really need to do is to find Americans who lose out if we cannot export to the US. The US citrus industry, for example, needs our oranges to keep the market interested in oranges during their non-growing season. And we should not forget those strange people who drive BMW X3s. The models sold in the US are only made here. And even if they are rubbish cars (who can forget Jeremy Clarkson having to throw the sound guy out of the car to go and push, even now it's still worth watching), there is still a lobby for them in the US. I think we need to stop worrying so much about Agoa.
Daily Maverick
2 days ago
- Business
- Daily Maverick
SA farm exports to US rise 19% in Q1, a green sprout amid frosty diplomacy
An important point that emerges from this data is that if the fictional 'white genocide' and land seizures of Trump's imagination were actually unfolding, then South African commercial farmers – who are mostly white – would not be in a position to grow their exports to markets such as the US. South Africa's agricultural exports to the US increased 19% in the first quarter (Q1) of this year compared with the same period in 2024, according to data from Trade Map, which was crunched by the Agricultural Business Chamber (Agbiz) and released on Monday. It is an interesting trend that highlights several important points against the backdrop of a frosty diplomatic landscape amid US President Donald Trump's false claims about a 'white genocide' and the ruthless persecution of white farmers, which was on full display during his recent White House meeting with South African President Cyril Ramaphosa. For starters, as South Africa faces the prospect of exclusion from the Africa Growth and Opportunity Act (Agoa) – which provides preferential treatment to the US market for eligible countries – it is clear that there is American demand for agricultural products grown or made here. Specifically, these products are mainly citrus, grapes, wine, and fruit juices – South African products that could surely grow in the massive US market. Some might see America as a fairly small market in the broader scheme of things, with the 19% year-on-year rise in Q1 only amounting to $202-million – 6% of all South African agricultural exports in that period, which grew 10% to $3.36-billion. But 6% is material: this slow-growth, high-unemployment economy needs to pluck any fruit it can – and this stuff is low-hanging. Americans love citrus and fruit juice, a point underscored by the fact that global prices for these products are heavily influenced by the New York-based OJ futures market. Another important point that emerges from this data is that if the fictional 'white genocide' and land seizures of Trump's imagination were actually unfolding, then South African commercial farmers – who are mostly white – would not be in a position to grow their exports to markets such as the US. What this means: South Africa's commercial agricultural sector is a budding rose among the thorns of this moribund economy. It needs continued access to markets such as the US to grow and create badly needed jobs and investment opportunities while bringing in export revenue to help support the rand. South African farmers can find other markets, but the US, as the world's largest economy, remains the big prize. This does not mean that South Africa's agricultural sector isn't facing a range of serious political, economic and environmental challenges. The Expropriation Act is a red flag for South Africa's commercial farmers and investors more widely. That there are still glaring disparities in ownership – with only about 25% of farmland now in the hands of black South Africans, according to Agbiz estimates – is largely a reflection of state failure and dithering, corruption and incompetence under the ANC. Still, even in the face of other challenges such as climate change, South Africa's agricultural sector is prospering, a narrative at odds with Trump's view that a Zimbabwe-style mass land grab is under way. Americans clearly want to drink South African wine and fruit juice, and farmers here can meet that demand. Instead, Trump's racist resentment threatens to reap a bitter harvest from what should be fields of hope. BM
The Citizen
2 days ago
- Business
- The Citizen
Outlook for first quarter GDP not great
Economic data for the first quarter releases already seem to support the view that the economy did not grow, signalling bad news for GDP. The outlook for the first quarter GDP figures is not great, and economists say the economy probably contracted instead of growing. Crystal Huntley and Nicky Weimar, economists at the Nedbank Group Economic Unit, think that economic growth was likely stagnant during the first quarter. 'High-frequency statistics reflected stagnant economic activity over the first quarter.' 'Agriculture will probably be the star performer. In contrast, activity in mining, manufacturing, electricity, construction and trade relapsed, still held back by a difficult operating environment, aggravated by persistent inefficiencies in essential economic infrastructure and the stronger base in the first quarter.' They also do not expect that real gross domestic growth (GDP) is forecast to make any gains in the first quarter, slowing from 0.6% in the fourth quarter of 2024. 'Agriculture, transport and communications, finance, general government and personal services increased over the first quarter. However, while retail, motor trade sales and real income from accommodation and food services accelerated, wholesale sales fell, dampening the contribution from trade to overall GDP.' They point out that energy, mining and manufacturing contracted, driven by the return of load shedding, infrastructure failures and subdued domestic and global demand. ALSO READ: This is where we would be if SA sustained an economic growth rate of 4.5% Despite bad GDP outlook for first quarter, economy will grow in 2025 But it is not all doom and gloom, they say. 'We expect some acceleration in growth during the remainder of the year. The main boost will come from domestic demand, supported by firmer consumer confidence, sustained by a recovery in real household incomes driven by lower inflation and lower debt service costs due to lower interest rates. 'Despite minor progress on the structural front, operating conditions remain challenging and production costs high. The weaker global recovery will weigh on output, particularly given South Africa's elevated cost structures, underlying inefficiencies and significant infrastructure constraints. 'Accelerating structural reforms are the key to enhancing the international competitiveness of industries. This would enable the economy to grow faster and create more jobs without hitting supply bottlenecks, driving up costs and stoking inflation. 'Overall, we expect growth of 1% in 2025 and 1.5% on average over the next three years. However, the uncertain global environment and implicit collapse of the African Growth and Opportunity Act (Agoa) pose significant downside risks.' ALSO READ: Manufacturing PMI falls to lowest level since April 2020 — bad news for GDP Contraction of 0/1% expected for first quarter GDP Mamello Matikinca-Ngwenya, Siphamandla Mkhwanazi, Thanda Sithole and Koketso Mano, economists at FNB, say real GDP (not seasonally adjusted) grew by 0.9% compared to a year ago in the fourth quarter of 2024, up from 0.4% in the third quarter. 'On a seasonally adjusted (non-annualised) basis, the economy expanded by 0.6% in the fourth quarter, marking a modest rebound from a 0.1% contraction in the third quarter. Although there is uncertainty surrounding the notoriously volatile agricultural sector, and while it may perform relatively well, high-frequency data from other sectors suggest that the economy weakened in the first three months of this year compared to the last three months of 2024. 'We pencil in a quarterly GDP contraction of 0.1% (final estimate) for the first quarter, reflecting softer economic activity in higher-weighted sectors such as mining, manufacturing and trade.' ALSO READ: R466bn 'hit' as National Treasury lowers SA GDP forecast Medium-term outlook for GFP Over the medium-term, Huntley and Weimar expect the economy to recover in 2025. 'Our forecast is for growth of 1.0% for the year, averaging 1.5% over the next three years. South Africa's structural constraints remain pretty much the same, with only minor improvements from the previous year. 'Lower inflation and interest rates will provide impetus for demand. The outlook for agriculture is more promising for 2025. The La Niña rains boosted farmer sentiment. As of 30 April, the winter cereal planting intentions stood 1.1% higher than the production figures for 2024. 'Further optimism depends on better financial conditions for farmers given the lower interest rate environment, progress in controlling animal diseases and the hope that port improvements will continue.' They say this is reflected in the Agribiz confidence index, which improved by 11 percentage points from the fourth quarter to the first quarter. However, they say several structural and cyclical challenges remain. 'The livestock industry continues to grapple with animal diseases and elevated feed costs, while excessive rainfall in some regions raised concerns about crop quality, and while wine production is recovering, it remains below pre-pandemic levels. ALSO READ: Reserve Bank cuts repo rate thanks to lower inflation, stronger rand Downside risks for GDP 'Further downside risks emanating from the Trump administration's tariffs and the implicit end to Agoa, fractured geopolitics, port inefficiencies, poor rail and road infrastructure, crime, stock theft, worsening municipal service delivery, and ultimately, farm profitability. However, despite these headwinds, they forecast agriculture to grow by 10.3% in 2025 off last year's low base.' They also point out that after a relatively stable year, load shedding returned at the start of 2025, underscoring persistent vulnerabilities in the electricity system. 'Excess demand nearly doubled between 2020 and 2024, while Eskom's use of its compensatory load (including load interruptions, imports and open-cycle gas turbines) increased by 21%. 'Therefore, the reoccurrence of load shedding is unsurprising. Still, the situation has improved since the peak of the crisis in 2023. From 2023 to April 2025, excess demand dropped by 94%, manual load reduction by 95%, compensatory load usage by 65% and loadshedding by 94%.'
Yahoo
23-05-2025
- Politics
- Yahoo
Rebuked by Trump but praised at home: How Ramaphosa might gain from US showdown
South Africa's President Cyril Ramaphosa and his delegation went to Washington this week hoping for a boost and a reset after months of acrimony with the Donald Trump administration. Instead they got brutal, high-stakes diplomacy, peppered with insults, and played out to millions across the world in real time. It was like a painful job review carried out by a boss on a loud hailer. Praised by many for remaining composed and reconciliatory in the face of an exercised Trump, while also criticised by some for not responding more forcefully to Tump's accusations, reality awaits Ramaphosa back in South Africa where he and his African National Congress (ANC) face pressures on multiple fronts. The ANC has been in an uneasy coalition - or government of national unity (GNU) - with 10 other parties for almost a year, forced into sharing power after dismal results in national elections. There have been public fights between parties inside and outside the coalition over controversial land and healthcare legislation and attempts to push a budget through parliament which would hike taxes for the most vulnerable. That almost saw the end of the coalition earlier this year. The economy is stagnating, crime rates are sky-high as is corruption and unemployment, public services are largely dysfunctional and infrastructure is crumbling. There also seems to be very little accountability for those who break the law. This has meant uncomfortable and intense questions about Ramaphosa's policies by various political parties, as well as civil society. Meanwhile the ANC itself is unstable, as opposing factions begin jockeying for position ahead of a crucial elective conference in 2027 which is likely to see a new party leader emerge. At the same time, Ramaphosa's loudest critics, such as the Economic Freedom Fighters (EFF) leader Julius Malema - who featured prominently in Trump's discredited dossier of "evidence" that genocide was being committed against white Afrikaners in South Africa - as well as former President Jacob Zuma, have been getting louder still. So Ramaphosa was looking for a trade deal, desperately needing the business and stability this would bring to South Africa to stimulate real and lasting economic growth and put people back to work. Ramaphosa said as much to Trump on Wednesday - that US investment was needed to help tackle the joblessness that was a key factor in the country's high crime rate. The risk that the Agoa trade deal with the US may not be renewed later this year because of Trump's isolationist worldview have made this all the more urgent. This gave South Africa duty-free access to the US market for certain goods, and is credited with having boosted South Africa's fragile economy. But the talk of trade was overshadowed by Trump's Oval Office ambush over discredited claims that white South Africans were being persecuted. However, there may still be a silver lining for Ramaphosa, and by extension his party, at least domestically. Yes, the to-do list is impossibly long, and yes the pressure for the South African president to hold a coalition and party together that is messy and deeply uncomfortable will be waiting for him on his return. And yes the ANC is in the weakest position since it came to power 30 years ago. But it's still in power, even if it's sharing it. Crucially, Ramaphosa's conduct with Trump reminded South Africans of his diplomatic pedigree, and of his importance to the country's rules-based order. He is, along with Nelson Mandela, South Africa's greatest ever alliance builder and facilitator. He was at the nerve centre of negotiating an end to the racist system of apartheid in the early 1990s, and in keeping South Africa together when many had prophesised its fatal fracture. He has stayed calm, smiled and faced down far more bitter opponents before. More recently, he steered the country out of the bleak "state capture" years of the Zuma administration and then through the difficult Covid lockdowns. And also kept the ANC on its feet - just - when it hobbled home after the 2024 elections. He then he took a wounded ANC into coalition politics and survived as president despite opposition from within his own party. "I believe if a snap poll was done today, we would see his personal ratings go up," says South African editor and founder of Verashni Pillay. "He excels in these high-pressure situations. He has this wealth of negotiating experience in arguably far more tense environments where there has been actual blood on the streets and imminent civil war. That's why you saw him looking particularly relaxed. He's masterful at diffusing tension at key moments." Surveys have consistently referenced the Ramaphosa Effect - the most recent from the Social Research Foundation last month which suggests that without him, the ANC would haemorrhage support even more than it already has, despite equally consistent criticism of the South African president that he is too slow and indecisive in tackling the country's biggest problems. To a large extent, that's still the case. But events this week, ostensibly meant to bully, ridicule and embarrass Ramaphosa around the world, actually reminded many South Africans of what he brings to the government and the country - a constant, stable and predictable centre. Fact-checking Trump's Oval Office confrontation with Ramaphosa Ramaphosa keeps cool during Trump's choreographed onslaught On the South African road incorrectly identified as a 'burial site' by Trump "I think what happened in the Oval Office has reinforced the idea of 'If not Ramaphosa then who?'" says Pillay. In fact, some think that what South Africans saw in the White House will actually strengthen the GNU - backed as it is by big business, which will ultimately reassure South Africans who were watching the drama. "The meeting displayed a united front from South Africa, a public-private performance that the country has been promoting for over a decade. This for the GNU is great political theatre that translates into political capital," says Itumeleng Makgetla, a political analyst at the University of Pretoria. And indeed, the optics were all there. Ramaphosa facilitated a passionate rebuttal of the worst of Trump's misinformation through interventions from his partner in the GNU - Democratic Alliance (DA) leader John Steenhuisen - and one of South Africa's wealthiest people, Johann Rupert - both white South Africans. If Trump understood the power of performance, so too did Ramaphosa. "I do think the GNU comes out of this looking quite strong," says Pillay. "The GNU happened at a really good moment for South Africa ahead of this crisis. If it was just the ANC government in the room, [Ramaphosa's arguments] wouldn't have landed. But being able to say that we have these parties that represent white people in government is such a strong statement." So what does this all mean for those on the extreme flanks of South African politics and discourse? After the lights dimmed, Julius Malema was shown by Trump singing a song that some say calls for the murder of white farmers, although a court has ruled it is just political rhetoric. Might he reap domestic political capital from being thrust into the global spotlight? Yes, say some. "For those in the country that are quite tired of the diatribe from President Trump and the US… this will likely strengthen Malema [and] parties like the MK because it'll basically be saying: 'Look, surely we can't be bending over backwards for such individuals and lies,'" says South African political analyst Prof Kagiso "TK" Pooe from the University of the Witwatersrand in Johannesburg. But Pillay disagrees. "This will not translate into political power for Malema. Most of his top leaders have already defected to Jacob Zuma's MK party. Things for the EFF were not looking good, even before Wednesday. Julius Malema's brand of politics, of wanting everything to burn down, of blaming white people for everything... is entertaining but it hasn't won votes because most South Africans don't want their country to be burnt down." Having said that, there is a sizeable group of South Africans who want faster and more radical change - the election results for the MK party, a breakaway faction of the ANC, shows that. And what of Afriforum - the Afrikaner interest group that tugged at the ears of Trump's supporters for a number of years by lobbying and spreading right-wing propaganda, hoping to be heard? Trump's discredited audio-visual presentation of what he said was the systematic extermination of white Afrikaner farmers was the high-water mark of their lobbying efforts, amplified as they were in the Oval Office. Yet, despite extraordinarily high levels of violent crime in South Africa, many are angry at the group. "In a way, I think a lot of South Africans - even those that don't support the ANC - can finally see that there are certain people that are not for South Africa. Those people have been singled out and that's a positive in a way," says Prof Pooe. "We know a large number of Afrikaans speakers are people of colour," says Pillay. "Afriforum dealt a severe blow to the cause of Afrikaners in South Africa by racialising it." Afriforum's Kallie Kriel has defended the group's conduct on a local television channel, Newzroom Afrika: "It wasn't Afriforum chanting genocidal calls for someone to be killed. If President Ramaphosa went there to tell the Americans that they don't know what's going on, they will see that as an insult because they have an embassy in South Africa and a State Department and intelligence services," he said. As the dust settles from Wednesday's drama, Ramaphosa will be watching and calculating. He has consistently been at the centre of key inflection points in recent South African history when some kind of a rupture has occurred and the country has had to change course dramatically. He reads these moments so well. Wednesday's upheaval in Trump's White House may not have been the economic and diplomatic reset with the US that was hoped, but could yet mark a dramatic reset for Ramaphosa and the GNU with the South African public. Additional reporting by Khanyisile Ngcobo in Johannesburg South Africa crime statistics debunk 'white genocide' claims - minister How Trump-Ramaphosa confrontation went down in South Africa Is there a genocide of white South Africans as Trump claims? Do Afrikaners want to take Trump up on his South African refugee offer? Go to for more news from the African continent. Follow us on Twitter @BBCAfrica, on Facebook at BBC Africa or on Instagram at bbcafrica Africa Daily Focus on Africa
The Citizen
22-05-2025
- Business
- The Citizen
Tariffs and Agoa: How Parks Tau summarised US-SA trade talks
Trade and Industry Minister Parks Tau highlighted the key areas of trade talks held with United States officials this week. Minister of Trade and Industry, Parks Tau, provided a brief outline of his team's engagements with officials from the United States. Tau addressed the media on Wednesday evening as the dust settled on a frenetic meeting between Presidents Donald Trump and Cyril Ramaphosa in a packed Oval Office. Trade relations were identified as a key objective of the trip to the US, with Tau discussing tariffs, minerals, and the African Growth and Opportunity Act (Agoa). Framework agreement submitted Tau, along with Agricultural Minister John Steenhuisen, said the two had been in talks with their US counterparts since Monday. At the first meeting of trade representatives, US officials provided feedback on areas where the nations may not have aligned. Tau said the SA delegation relayed this feedback back home, resulting in a revised proposal submitted on Wednesday. 'We have submitted a proposal to the United States with regards to a framework agreement, focusing on issues related to trade and investment,' said Tau. The proposal identified areas for increased trade and access to each party's markets, while illustrating the benefits of keeping channels as open as possible. Agoa still before Congress On Agoa, Tau said that South African officials were informed that the agreement was still before Congress and would be settled later. 'Having met with the trade ministers in Africa at the recent African Continental Free Trade Area Council of Ministers, we have agreed to develop a collective approach with regard to Agoa,' said Tau. He added that a US-Africa trade forum, at which the African leaders would present this collective agreement, was in the pipeline. 'As South Africa, we have it in our document that the reauthorisation of Agoa is important,' Tau said. The minister highlighted the role of South Africa's neighbours in negotiations through the Southern African Customs Union (Sacu). 'The context of discussing Sacu is because we negotiate tariffs as a customs union, and this is one of the areas that the US required a bit more elaboration. 'We agreed that we would have the issues on tariffs and non-tariff barriers added, which are the issues we added yesterday,' Tau explained. Tariff implications Tau insisted that South Africa was a positive contributor to the US's interests. The minister claimed that 77% of the products that the US accessed in South African markets were done so tariff-free. 'When we talk tariffs, we are only relating to them in relation to the products that are not listed in the 77%. 'We also indicated the reality that with regards to the main products we sell into the US, these would include some of our minerals, minerals even under the reciprocal tariffs have been excluded,' he explained. Tau said South Africa supplied 12 of the US' priority minerals, and it was the primary supplier of nine of them. Other trade avenues mentioned were the establishment of digital opportunities and South Africa gaining access to US liquefied natural gas. Equity equivalent Concerns about employment equity hampering potential US investment were addressed, with Tau stating that at least 10 US companies were benefiting from an existing accommodation. Tau explained that South Africa had a programme to help bridge employment equity gaps called the Equity Equivalent Programmes for Multinationals. These equity equivalent programmes allow foreign companies to offset their black economic empowerment requirements against skills development or socio-economic programmes. 'They are participating in a manner that enables supply and enterprise development. So, they are building the capacity of their own suppliers in our region, which increases their ability to produce in the country,' stated Tau. This may open the door for any of Elon Musk's enterprises, with the minister saying Ramaphosa had already met with the South African-born businessman last year. 'We are continuing to pursue Tesla with regards to investing in South Africa as part of the original equipment manufacturers, and we intend to pursue that discussion with them,' Tau concluded. NOW READ: Ramaphosa says Trump meeting a success despite ambush [VIDEO]
