00:00Andira, what's the real impact on the expiration of AGOA for African exporters, consumers and also jobs?
00:11Good morning, Jennifer. So the impact is really clear. The African Union estimates that 350,000 direct jobs are going to be impacted.
00:19A million indirect jobs are also at risk. And if we just put this into context of countries,
00:23for example, 12,000 jobs at risk. And this is a third of the total industry. Kenya, 66,000 jobs at risk.
00:31And these are just numbers that are pulled out of thin air. If we go back to 2021, when Ethiopia lost their AGOA access, 11,000 jobs were lost.
00:40And so what we're looking at right now is U.S. consumers could be contending with higher prices and also a reduced pool of goods to choose from.
00:47And also the one-year extension that you're mentioning, though it's welcome news, it does very little to ease the tension and anxiety
00:53that businesses are currently experiencing. And it will make it really difficult to do forward planning.
00:59When this AGOA agreement fully expires, what we're likely to see is a major drop in imports, particularly from countries like Kenya, Tanzania and South Africa.
01:08And these losses are expected to be heavily concentrated in motor vehicles, metals and also things like chemicals.
01:14You add to the fact that Trump introduced tariffs 10 to 30 percent. But there's a caveat to this. Certain energy goods and metals are exempted.
01:22And this begs the question on the new trade trajectory that President Donald Trump wants to take with Africa.
01:28You have African leaders saying they want to veer away from exporting raw materials.
01:33But then they have tried to build manufacturing economies. They're adding value to their goods and creating jobs.
01:40And now Trump is saying away with that. We just want raw materials.
01:44So on top of the eight to ten billion dollars that is a geography, systems and ecosystems could also be at risk.
01:50Yeah, it's top of mind for a number of leaders.
01:54Bloomberg's Andiro Oganga in Kigali, Rwanda. Andiro, thanks so much for being with us.
01:59Now, First Rand CEO Mary Vilikazi echoed a similar sentiment that Andiro was just walking us through there.
02:04In an interview at Bloomberg's Women, Money and Power Conference, she said businesses in South Africa aren't betting on an AGOA extension
02:12and are making plans to minimize the fallout.
02:17Our clients that operate in sectors where they export and they've been beneficiaries of AGOA are already making plans.
02:26But, I mean, there's no doubt that it's going to have an impact on jobs.
02:29It's going to have an impact on just those companies' ability to grow.
02:32And more so the countries on the continent.
02:37You know, I think South African countries now reading the leaves for the last couple of months.
02:42They've, you know, they are not betting on AGOA being renewed.
02:45It would be great if it's actually renewed.
02:47But I think that they are making alternative plans.
02:50But, I mean, across the continent, some markets are, you know, they don't have the kind of resources to be able to diversify away.
02:56So, again, hopefully that's one that it goes through Congress and it's, again, supported.
03:01But, yeah, I mean, I think there's also quite a high likelihood that that's not the one where South Africa is able to be successful.
03:08I mean, if you look at Botswana and Lesotho, some of our neighboring regions, you know, their tariffs are lower and South Africa is higher.
03:15So, we cannot discount the fact that, you know, there's a political tension there that might get in the way.
03:21Yeah.
03:21That being said, you know, we're talking about all of these global macro headwinds.
03:25And if you look at when you posted your earnings a couple of weeks ago, my colleague Jennifer Zabazaja spoke to you around the earnings.
03:32Pretty solid earnings growth north of, you know, 13%.
03:35Where is that growth coming from in an environment where there's so many global macro uncertainties?
03:41Yeah.
03:41So, I guess the GDP growth in South Africa has really been leg last up for quite a number of years.
03:50And largely because, you know, the economy has been hamstrung by state-owned entities that have a monopoly on transport energy that have not been functioning for a very long time.
04:03So, one of the things that give us hope and, you know, I think we're able to be constructive with the outlook is the economic reforms that are taking place in the country.
04:12So, on energy, I think ESCOM has done well to stabilise the days of load shedding.
04:18And then the energy factor and reliability factor keeps on improving.
04:22So, that's a positive outlook.
04:24There are more reforms that still need to take place.
04:27But, you know, as business, we encourage that government at last is tackling some of these structural impediments to growth.
04:35So, in the medium term, we're quite constructive about that.
04:38And, again, on the transport and logistics side, that's also improving this momentum.
04:43Recently, about 11 private sector companies have been awarded a contract to be able to operate on some of the trans-nit lines.
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