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Parks Tau took on the role of Trade, Industry, and Competition Minister in mid-2024 after South Africa’s elections, confronting various challenges as the country navigates a complicated landscape of international relations and priorities.
Through the BRICS+ framework, South Africa seeks to strengthen its trade and investment prospects with both founding and new members of the bloc. China has been South Africa’s leading trade partner for over a decade; however, this partnership faces significant imbalances, primarily characterized by the export of raw materials in exchange for manufactured goods.
Tau is committed to nurturing positive relations with the United States, highlighting South Africa’s non-alignment in global political matters. This effort has gained momentum as the renewal deadline for the African Growth and Opportunity Act (AGOA) approaches in 2025.
Since its establishment in 2000, AGOA has allowed qualifying sub-Saharan African countries to access the US market duty-free.
As the continent’s most diversified economy, South Africa stands to gain significantly and is focused on advocating for the initiative’s renewal while strengthening connections with the new administration.
African agenda
The country is also committed to promoting its African agenda, with the successful implementation of the African Continental Free Trade Area (AfCFTA) being a key focus of its policy objectives.
Tau stated that South Africa intends to leverage its international partnerships, including its G20 chairmanship in 2025, to push for a favorable trade agenda, which benefits not only the Global South but Africa specifically. South Africa is currently the only African member in the G20, alongside the African Union, which now occupies a seat as well.
South Africa is balancing its international trade strategies with domestic export-driven initiatives. As a participant in the AfCFTA, it aims to enhance trade under this agreement, especially as it stands as the largest exporter of finished goods on the continent.
At present, approximately 25% of South Africa’s overall exports are directed toward other African countries, with those in Southern Africa comprising 90% of these exports.
In 2022, manufactured goods constituted 64.3% of South Africa’s exports to Africa, compared to 43.9% of its total global exports.
South Africa began trading under the AfCFTA in January 2024 through the Guided Trade Initiative—a pilot scheme aimed at evaluating the operational, institutional, legal, and trade policy environment as participating countries become more actively involved in the program.
High-growth sectors
According to Tau, industrial policy plays a crucial role in South Africa’s economic development strategy, shifting focus toward high-growth sectors that promise substantial returns. “These sectors include the green economy, smart agriculture and agro-processing, automotive, iron and steel, organic chemicals, and the digital economy,” he explains. This policy will also maintain a strong emphasis on local content to foster skill development and stimulate demand for targeted manufactured goods.
The government is working in collaboration with the private sector to address significant infrastructure and logistical issues as it prepares to boost exports.