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New Trade, Industry and Competition Minister Parks Tau took over the role in mid-2024 after South Africa’s election and has had his work cut out for him as the country manages a complex set of international relationships and priorities.
Under BRICS+, South Africa hopes to leverage advantage for trade and investment with the original members of the bloc as well as its new members. China has been South Africa’s leading trade partner for more than a decade – although the relationship is unbalanced, with mostly raw materials going out and manufactured goods coming in.
Tau has also spent time in his new portfolio ensuring that relations with the US run smoothly, highlighting the country’s non-aligned position in global politics. This effort has gained momentum as the deadline for the renewal of the African Growth and Opportunity Act (AGOA) looms in 2025.
Since 2000 AGOA has provided duty-free access to the US market for the exports of eligible sub-Saharan African countries.
South Africa, the continent’s most diversified economy, is a major beneficiary and is focused on ensuring the initiative is renewed and that ties with the new administration are strengthened.
African agenda
The country is also focused on its African agenda, with the success of the African Continental Free Trade Area (AfCFTA) being at the centre of its policy agenda.
South Africa, says Tau, will use its international relationships, including its 2025 chairmanship of the G20, to drive a positive trade agenda not just for the Global South but specifically for Africa. The country is the only African state on the G20; the African Union now holds a seat too.
South Africa is not just balancing its international trade strategy but also its domestic and export-driven agendas. It is already trading under the AfCFTA, but hopes to increase the share of trade under the agreement, particularly given that it is the biggest African exporter of finished goods.
About a quarter of South Africa’s total exports currently go to other African countries, particularly those in Southern Africa, which accounts for 90% of its exports.
South Africa’s exports to Africa consisted of 64.3% manufactured products in 2022, in comparison to 43.9% of its global exports.
The country began trading under the AfCFTA in January 2024 under the Guided Trade Initiative, a pilot under the agreement that seeks to test the operational, institutional, legal and trade policy environment by qualifying countries as the programme gains speed.
High-growth sectors
Industrial policy is at the centre of South Africa’s economic development strategy, says Tau, and the country is realigning its strategy to focus on high-growth sectors that promise significant returns: “these include the green economy, smart agriculture and agro-processing, automotives, iron and steel, organic chemicals, and the digital economy,” Tau says. Policy will also continue to focus on local content as a means of building skills and demand for targeted manufactured products.
“By focusing on these sectors, we aim to stimulate growth, create jobs and position SA as a global leader in these industries,” Tau says.
The government is working with the private sector to address serious infrastructure and logistics challenges as it gears up to increase exports.
“Our commitment,” Tau says, “is to make SA a welcoming, dynamic hub for international investment, with a focus on modernising our workforce to meet the demands of the 21st century.”