South African automakers eye increased investment in extended AGOA trade program

Aug 25, 2015 The extension of the African Growth and Opportunities Act is expected to increase trade flows between the continent and the U.S. for the next decade.

The Act allows African countries duty-free access to U.S. markets, and is expected to give Africa a competitive edge over other suppliers around the world. The South African automobile industry is positioned to be a major beneficiary of this deal.

Edward Makwana, a communications manager at BMW South Africa had this to say;

“From our export perspective the USA is one of the biggest export markets that we export our 3 series sedan, so quite important quite a huge benefit on that because of the rebates we obviously that we get with the exports. And it is quite positive that at the moment there has been the renewal over the next ten years, so we busy obviously in talks with the relevant parties to make sure that, that relationship benefits both South Africa, well I guess us as a brand BMW, South Africa and obviously on the US side relevant parties on the USA side. So it has been quite positive to date so we really grateful that there has been the extension over the next ten years,”

With major players like Ford, General Motors and Nissan, the auto industry accounts for about 6 percent of the South African economy and 12 percent of its total exports.

Under AGOA, over 40 African countries export products such as cars, base metals, chemicals, citrus fruit, wines and nuts to the United State duty-free.

Dumile Cele, the chief executive of the Durban chamber of commerce and industry said the trade partnership has helped advance the country’s manufacturing sector.

“Since the introduction of AGOA, South Africa has been able to grow the export of besides the citrus which are agricultural goods besides those we have been able to export an enormous amount of vehicles, parts into the USA market. And by exporting vehicles, these are high valued goods what that means is that there has been a lot of economic activity or there is manufacturing ensures economic activity, which creates the jobs that South Africa needs. So that is really the real benefit of AGOA within a developing country like South Africa but I think more so within sub-Saharan Africa,”

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