Online Reporter
Africa is being forced to look towards itself in the current global “chaotic” trade environment, with the US introducing punitive measures against countries that do not toe the line the American way.
The South African government failed to secure a more favourable trade deal with officials from US President Donald Trump’s administration by Friday, August 1. As such, South African exports are now burdened with a 30 percent tariff.
Rob Davies, former minister of trade and industry and member of the African Continental Free Trade Area’s (AfCFTA’s) trade and industrial development advisory council, said the current global conjuncture is adding to the imperative for collaboration and coordination within the African trade area.
“Many of the rules preventing us from using policy tools to increase our value chains are being weakened and in fact being jettisoned by the developed world for their own reasons. The US has completely upended the system,” said Davies in the closing session of the 2025 Trade and Industrial Policy Strategies (Tips) Forum in Sandton last week.
Countries such as Indonesia have taken advantage of the weakened enforcement of trade rules. The country insisted on export taxes on the export of nickel as a raw material. It also insisted on some levels of beneficiation before export.
Davies said information at his disposal suggested that Indonesia saw a 30-fold increase in value from its nickel value chain just from smelting the raw material.
The incentives for integration and collaboration in Africa will have to be in the design of the policies and programmes of the AfCFTA agreement.
“The incentive that is not available is someone playing Father Christmas. There is no one (who) is going to throw money around and mobilise everyone that way,” said Davies.
Davies said Africa’s combined gross domestic product makes it the world’s eighth-largest economy. — Moneyweb
