The expiry of a trade pact that gave African countries preferential access to the US market will hurt companies and result in job losses, according to FirstRand Chief Executive Officer Mary Vilakazi.<\/p>\n\n\n\n
Businesses in South Africa aren\u2019t betting on an extension to the African Growth and Opportunity Act (AGOA) and are already making plans to identify other markets for their exports to minimize the fallout, the banker said at Bloomberg\u2019s Women, Money & Power conference in London on Wednesday.<\/p>\n\n\n\n
\u201cThere\u2019s no doubt that it\u2019s going to have an impact on jobs, it\u2019s going to have an impact on those companies\u2019 ability to grow, and more so on the countries on the continent,\u201d Vilakazi said.<\/p>\n\n\n\n
AGOA, which gives duty-free access to some key industrial exports, was first approved by the US in 2000 under the Clinton administration to help sub-Saharan African economies. <\/p>\n\n\n\n
Its future was thrown into doubt by President Donald Trump\u2019s trade wars \u2014 he imposed 30% tariffs on South Africa. The pact was set to expire on Sept. 30 if not reauthorized by the US Congress.<\/p>\n\n\n\n
African governments have been lobbying the trump administration in hopes of an extension to the trade pact. <\/p>\n\n\n\n
The US is South Africa\u2019s second-largest trading partner. Countries in the region have been \u201creading the leaves\u201d for the last couple of months, Vilakazi added.<\/p>\n\n\n\n
\u201cIt would be great if it\u2019s actually renewed, but I think that they are making alternative plans,\u201d she said. <\/p>\n\n\n\n
As for the 30% tariffs imposed by the US on South African goods, Vilakazi said discussions are still underway and \u201cwe are optimistic that they\u2019re going to get to a landing.\u201d <\/p>\n\n\n\n
\u201cWe would like to see the relationship make less headlines for the reasons that they have,\u201d she added.<\/p>\n\n\n\n
Despite the storm kicked off by the tariffs, Vilakazi says ongoing reforms and reduced political risks have revived investor demand for South African assets. <\/p>\n\n\n\n
Investors have been flocking back to buy its stocks and bonds, sending the benchmark FTSE\/JSE Africa All Share Index to fresh records. <\/p>\n\n\n\n
South Africa\u2019s sovereign risk premium has also declined to levels last seen in 2018. The rand has also advanced to its strongest level in a year.\u00a0<\/p>\n\n\n\n
The country\u2019s so-called government of national unity \u2014 set up after last year\u2019s elections failed to produce an outright winner \u2014 has been working to implement structural reforms to lift economic growth. <\/p>\n\n\n\n
So far, those changes have stabilized the nation\u2019s electricity supply and are starting to improve the logistics sector, whose collapse saw coal exports plunge to a three-decade low.<\/p>\n\n\n\n
\u201cAs a business, we are encouraged that the government, at last, is tackling some of these structural impediments to growth,\u201d Vilakazi said. \u201cSo in the medium term, we\u2019re quite constructive about that.\u201d<\/p>\n\n\n\n
She further welcomed the decision by South Africa\u2019s monetary authorities to anchor inflation at 3%, saying the earlier target was outdated. <\/p>\n","protected":false},"excerpt":{"rendered":"
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