The Chairperson of the Portfolio Committee on International Relations and Cooperation, Mr Siphosezwe Masango, has welcomed the establishment of the African Continental Free Trade Area (AfCFTA), an initiative by African countries to promote intra-African trade, create bigger markets and improve the prospects of the continent to attract investments.
Speaking at a mini-plenary of the National Assembly to debate the budget vote of the Department of International Relations and Cooperation, Mr Masango said AfCFTA is essential to drive development and regional integration in Africa as is the case with other regions of the world like the European Union and Asia.
We welcome the launch of the African Continental Free Trade Area which was launched in March 2018 in Kigali, Rwanda, and we believe it will create an opportunity to create larger economics of scale, a bigger market and improve the prospects of the African continent to attract investments. We need to increase the intra-Africa trade, he said.
The Chairperson of the committee also suggested that South Africa needs to deploy more economic diplomats in strategic countries and create an aggressive Pan-African Trade Negotiating Team in the World Trade Organisation (WTO), to offset the continuous trade deficit in Africa.
Minister of International Relations and Cooperation, Ms Lindiwe Sisulu, said South Africa's participation in AfCFTA will assist businesses in the country to expand into the African market and in so doing, contribute to the economic development of the continent.
For South Africa in particular it will serve to address the triple challenge of unemployment, poverty and inequality as set out in the National Development Plan, she said.
Minister Sisulu added that the President's target to raise R1 trillion (about R12 trillion) in investments over five years, will not only benefit South Africa, but also the African continent. We believe that if we can create a stable Africa, we can unleash its potential. The resources of this continent are enormous and if properly tapped, they will change the fortunes of the whole continent for generations to come, said the Minister.
She also said the trust that South Africa enjoyed as an investment destination has been eroded over time, and this has been seen in the decline in ratings by two prominent ratings agencies to sub-investment grade, or junk status.
However, over the past few months we have made great strides to create an environment in which our investment partners feel we are a dependable partner. Ratings agency Moody's in March 2018 revised upwards South Africa's credit outlook to stable from negative, and affirmed the country's credit rating as investment grade. This is a sign that we are once more returning to the right path.
AfCFTA will bring together the 55 member states of the African Union covering a market of more than 1.2 billion people, including a growing middle class and a combined gross domestic product of US3.4 trillion (R40.8 trillion).
Regional integration is the central aspiration of the African Union's Agenda 2063 and remains a critical component of the content's efforts to ensure sustainable economic development and inclusive growth.
Ms Reginah Mhaule, the Deputy Minister of International Relations and Cooperation, said while efforts are underway to integrate African markets, this was an opportunity to integrate Africa's economy into the global sphere.
The department has been allocated a budget of R6.552 billion for the financial year 2018/19.
Source: Parliament of the Republic of South Africa