By Thoko Modise
All wars result in loss of human lives, destruction of public infrastructure, and disruption of trade and commerce. Wars are unimaginably destructive.
The ongoing 16-month long war between Russia and Ukraine is no different.
Since the war began on February 24, 2022, more than 60 000 people have lost their lives, 17 million people have been displaced from their homes, and damage to property of approximately $411 billion has been caused by the conflict.
Although the war is happening thousands of kilometres away from Africa, the continent has been hit hard by its impact, which has caused prices of food, energy, and fertilisers to skyrocket.
The continent is a net food importer and the African Development Bank (AfDB) notes that 15 African countries imported over 50% of their wheat products from Russia or Ukraine.
The Russia-Ukraine war has disrupted supply chains, resulting in a shortage of 30 million tones of grains in Africa while the reduction of fertiliser imports from Russia, Ukraine, and Belarus has triggered a sharp increase in global fertiliser prices.
The disruption to grain and fertiliser imports from Ukraine and Russia is increasing the risk of food insecurity in Africa, where food accounts for about 42% of household consumption.
Since the beginning of the war, African countries have been calling for an end to hostilities between Russia and Ukraine. African leaders have been pleading with both parties to lay down their arms and to negotiate a long-lasting peace settlement.
Many African nations including South Africa have taken a neutral and non-aligned stance on the conflict, hence they are resisting being pressured to pick sides in this war, which has escalated tensions between the world’s major superpowers.
The African continent knows too well the destruction and devastation caused by wars. For decades, the continent endured armed conflicts and its leaders have become experienced in facilitating mediation initiatives. It is for this reason that the continent sent a delegation of seven African countries, led by South African President Cyril Ramaphosa, on a peace mission to Ukraine and Russia.
In July, the leaders of South Africa, Egypt, Senegal, Congo-Brazzaville, Comoros, Zambia, and Uganda met separately with President Volodymyr Zelensky of Ukraine and President Vladimir Putin of the Russian Federation to persuade the two leaders to engage in a diplomatic dialogue to peacefully resolve the conflict.
The mission by African leaders complemented peace initiatives led by China and Turkey, which African leaders hope will yield results.
Therefore, it came as a surprise that four US congressmen drafted a letter appealing to the US government to relocate from South Africa an upcoming conference on African Growth and Opportunity Act (AGOA) to another country due to perceived close ties between Russia and South Africa.
The action of these congressmen has raised speculation that South Africa may be excluded from participating in AGOA, which grants duty-free preferential access to the US market for more than 1,800 products from sub-Saharan African exporters. The South African government has not received any indication from the US government of its intention to relocate the AGOA conference and is going ahead with preparations to host the event in November this year.
South Africa believes that the non-aligned stance it has taken on the Russia-Ukraine conflict does not in any way violate or undermine US national security or foreign policy interests. South Africa values its relationship with the US, which has remained strong and cordial since the country transitioned from apartheid to democracy nearly three decades ago.
Threats of exclusion of South Africa from AGOA are nothing new. A research note published by Rand Merchant Bank on 22 June 2023 points out that South Africa’s eligibility for AGOA has been challenged more than once.
The first time it was challenged was in 2015 when the US egg and chicken exporters raised concerns about accessing the South African market. Eventually the dispute was resolved, culminating in an agreement that was signed on 07 January 2016 allowing three US meat products (poultry, pork, and beef) into South Africa.
Furthermore, South Africa constantly fights off US special interest groups, that want it removed from AGOA on the grounds that it is a middle-income country that must be graduated out of AGOA. Their opposition is premised on the fact that South Africa is the only country that utilises AGOA benefits the most, resulting in South Africa accounting for 54% of all AGOA-related exports to the US.
These special interest groups fail to understand that South Africa is a country with huge developmental challenges that also exist in many least developed countries. South Africa is faced with high levels of unemployment, inequality, and poverty -- which are byproducts of the legacy of hundreds of years of colonialism and apartheid, where many citizens were excluded from participating in the economy.
A programme like AGOA is important to help South Africa address these challenges through industrialisation and employment creation. However, it must also be noted that the agreement signed in January 2016 between the US and South Africa to allow three meat products into the South African market, shows that our country is not just an AGOA beneficiary, it also reciprocates to the US.
As much as AGOA creates jobs in South Africa, it also generates jobs in the US. AGOA creates over 62, 000 in South Africa and more than 100, 000 jobs in the US. It is also important to note that 9.4% of South Africa’s exports were destined for the US in 2022 and AGOA accounted for 20.7% of South Africa’s exports to the US. Put differently, AGOA accounted for 1.95% of South Africa’s total exports in 2022.
South Africa intends to retain its participation in AGOA when the programme is up for renewal or extension in 2025. However, if it is unfairly excluded from AGOA, South Africa is confident that the loss of AGOA will be offset by South Africa’s participation in the African Continental Free Trade Area (AfCFTA), which has liberalised trade on 5,000 goods currently being traded across Africa.
AfCFTA, launched two years ago, has created the world’s largest free trade area spanning 47 countries with a combined gross domestic product (GDP) of $3.4 trillion and 1.3 billion people.
This opportunity is opened to US multinationals that want to set up in South Africa to access this world’s largest free trade area.
*Modise is the general manager in communications at Brand South Africa.
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