African nations joining trade party, SA experts say
South Africa is struggling to maintain its position as a heavyweight exporter in Africa, a trade expert has said, warning that structural economic weaknesses could undermine its long-term competitiveness on the continent.
Speaking on Nation in Conversation at the annual NAMPO Harvest Day, XA Global Trade Advisors Group founder and chief executive Donald MacKay said high unemployment and weaknesses in the education system were constraining economic growth and export capacity.
“We’ve got an unemployment rate which is, if not the highest, one of the highest in the world,” he said. “Yet we do very little to create a productive workforce. We don’t treat education like something that matters. And I’m not talking about university. I’m saying half the kids starting school don’t finish high school.”
MacKay said the failure to develop a productive skills base risked eroding South Africa’s influence in African trade.
“The unemployed are not just an even distribution – it’s not that you’re all PhDs in there. It’s not like that at all. And so we’re not creating an environment where South Africa has leverage on anything. Now we’re shocked because other African states are starting to be competitive,” he said, adding that dynamics were shifting under the African Continental Free Trade Area.
He said South Africa often viewed the agreement primarily as an export opportunity, while remaining wary of imports from other African states. “I’m a huge fan of the continental agreement, but the reality is we treat the continental agreement like a market we can sell to, but we’re terrified of African states sending anything into our market,” he said.
“No one joined the agreement because the market they wanted access to was Chad, for example. We are the prize, and we’re not using that in a way that makes sense. What we’re doing instead is just taking protectionist actions now against African states.”
He said long-term competitiveness would depend on improving human capital. “If we’re going to have leverage, then we’ve got to focus on the basics. How do we create a high-quality group of human capital in the country?”
SADC key
Nedbank South Africa’s head of transactional banking, Ovizikhunga Sicwetsha, said regional trade within the Southern African Development Community (SADC) remained central to South Africa’s export base.
“It is true that about 40% or so of our farm exports go to the continent. Of the revenue that we earn from that, about 80 to 90 cents in every dollar is just from the southern Africa region. There is nothing that we are getting from West Africa, the Maghreb region and East Africa that is that notable,” he said.
While the African Continental Free Trade Area (AfCFTA) has yet to deliver the scale of impact initially expected, there are signs of growing momentum, according to Wandile Sihlobo, agricultural economist and presidential adviser on land reform.
“We took a while to get to 54 states ratifying the agreement itself, but I think there is more political will across the continent,” he said.
He cited recent cross-border developments as evidence of progress. “Recently the presidents of Kenya and Tanzania have agreed on opening a refinery in Tanzania, which you would never have had between two African countries. You’ve seen developments in Angola with more power plants being developed.”
He added that emerging economic “nodes of excellence” suggested gradual change across the continent.
Sihlobo also said Africa needed to prepare for long-term demographic shifts, including a growing workforce by 2050. “The indication is that by 2050 Africa will have the biggest number of human bodies, and not just that, but it is the most productive of those bodies in the world,” he said.
He said greater regional trade integration and reduced reliance on external currencies could further support growth. “If you think about what happens in some of the markets in the rest of the continent – if you trade with them, you’re doing the trade in dollars, but they don’t have enough dollars to send out to you, and that becomes quite a constraint.”
