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Does the African Continental Free Trade Area mean business?



 When a large number of sovereign states launch an ambitious new free trade project and conclude binding treaties to signal their resolve, we should pay attention. If these are African states and the launching ceremony is attended by several Heads of State and Government, the occasion merits closer attention.

Certain questions need to be posed: What are they launching, why are they doing so, and how will this new arrangement work? What will change when?


In This Issue

South Africa ideally placed to benefit from AfCFTA

It is official. The African Continental Free Trade Agreement (AfCFTA) has been signed. By all but Eritrea which it is said, is very likely to also come on board once their little spat with neighbouring Ethiopia is settled.

The entry of Nigeria, Africa’s largest economy, into the agreement in June, has sealed the deal. Eventually.

How will China’s negative current account affect Africa?

Is China’s buying spree over? The country has spent the last two decades turning its trade surplus into purchases of, and significant investments in, overseas assets. Africa has become a major destination for Chinese investment with some people jokingly referring to Africa as having become a Chinese province. 


Africa’s skills and technology squeeze

When it comes to manufacturing, South Africa is far behind countries like China, Taiwan, and the US.

Not surprisingly, China ranks as the most competitive manufacturing nation in the world, and has done so for years. This is no surprise as the country, which has thrown hundreds of billions at their manufacturing sector for years, has largely managed to shake off the ‘cheap Chinese crap’ label that has haunted it for so long, and has become the go-to manufacturer for many an international brand of late.


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Patience is the watchword, but local equities do offer some room for growth

While foreigners want to invest in South Africa due to competitive interest and exchange rates and the potential for stocks to pick up from weak levels, they will only do so when confidence improves. We desperately need a few positive headlines to do the rounds at a time when the world is certainly not a happy place in general.


Cybersecurity: attacks on businesses imminen

Malware attacks in SA increased by 22% in the first quarter of 2019 compared to the first quarter of 2018, translating to around 13 842 attempted cyberattacks per day, according to Kaspersky Lab, a leading online security provider.

A data breach in South Africa costs an average of R36.5 million according to an IBM security study conducted by the Ponemon Institute.

Crypto-currencies: digital, global, borderless money


“This is why most major financial institutions globally already have or are preparing to establish crypto desks. It is why more and more retail and institutional investors are piling into the market. And it is why tech giants, like Facebook, are getting involved. And you can bet that where Facebook follows, other tech companies will do the same."



Premature introduction of carbon tax may impede efficiency


The fact is that the implementation of the carbon tax at this particular time is likely to have disastrous effects on business as well as consumers, as under normal circumstances, at least a portion of the monstrous cost to companies of implementing and maintaining these carbon reductive measures, could be absorbed by the companies themselves.


Ports crisis: more delays and massive losses



“The biggest challenge from a shipper’s point of view is the delay in ship berthing which means containers that need to be packed for specific vessels are delayed, and likewise for importers (as in the case of Volkswagen South Africa) inventory is delayed,” notes Mitchell Brooke, logistics development manager at the Citrus Growers’ Association.



Bright future for Avocado exports


Recent years has seen quite a spurt in new avocado and macadamia nut plantations in South Africa, with some industries, like the forestry industry, actually citing avocados and macadamias as a threat to their industry, with an increasing amount of growers swapping a 25 year plus turnaround time for timber, for the relatively short turnaround time, and arguably, much greater margins, of avocados and macadamias.