Africa has chance to put terms to US
Tshabalala sees benefits arising from leaders’ summit
AMERICA’S market is saturated, Europe can’t get moving and China needs resources. It is no surprise, then, that Africa has held a clutch of economic summits with China, Europe and most recently the US.
The crucial determinant of outcomes for Africa will depend on bargaining power.
Sim Tshabalala, the joint CEO of Standard Bank, who attended the US Africa Leaders Summit this week, said South Africa Inc had declared itself open for business and trade, and had the nous to lock down beneficial trade terms with the world’s largest economy.
He is under no illusions about the impetus behind such summits. “The US is second to France in terms of foreign direct investment on the continent, and it trails China and the EU on trade. There are competitive forces driving the desire of the US to get involved in Africa.
“Africa has resources, the human capital, it’s growing fast, and it’s in a position to bargain. I don’t think the continent’s ever been in a better position to put terms to its partners.”
The Washington summit’s aim was to help US companies gain traction on the continent, which holds rich mineral deposits, fastgrowing economies and a burgeoning middle class. China has stolen the march on the US, with its trade with Africa passing $200billion (R2.1 trillion) last year, more than double that of the US.
Evidence of US corporate appetite for the opportunities in Africa included the announcement at the summit of deals worth $14-billion by companies such as General Electric and Coca-Cola.
So do African economies have the wherewithal to tilt the playing field in their favour?
Tshabalala said: “The test will be what our leaders and corporates do with the opportunities that arise. But I can tell you that corporates, the departments of trade and industry, international affairs and finance are all applying their minds.”
A prepared negotiation strategy, he said, was evident in Pres- ident Jacob Zuma’s many addresses to discussion forums.
“It was a strong signal that SA Inc is inextricably intertwined — business and government sat together talking to the US Chamber of Commerce.” The essence of Zuma’s message was that “we are open for business and open for partnerships”. He also emphasised the issue of the extension of the African Growth and Opportunity Act (Agoa).
Tshabalala said the importance of the extension of Agoa, and South Africa’s inclusion in it, could not be overestimated.
Zuma said he was “optimistic that Agoa would be renewed and with South Africa included as a beneficiary”. The act, due to expire next year, provides preferential access for some African products.
“We successfully conveyed the message that South Africa’s graduation from Agoa would damage the African Union’s regional integration initiatives, as well as industries in neigh- bouring countries,” Zuma said.
“That was one of the big messages we put across,” Tshabalala said. “We’ve asked to extend Agoa in such a way that it buttresses the Southern African Customs Union.
“It’s up to us as Africans to negotiate bargains where there’s more competition,” he said. — Additional reporting AFP and Bloomberg