Mcebisi Jonas, special envoy to President Cyril Ramaphosa, has urged South Africa to deepen its participation in trade with the EU and Global South platforms to launch the economy to new levels of growth as global trade fragmentation continues.
“We have to ensure we diversify our economy in ways that we have never thought about. Second, my view is we have to reduce the cost of doing business in South Africa so that we can better participate in the rising competition. But I was actually talking about forming new strategic partnerships, using our participation in Brics and in other areas.”
Jonas was speaking on the sidelines of the Investing in African Mining Indaba in Cape Town this week.
“We must be careful not to use that [as an excuse] not to move quickly, because there are cycles, and the cycle is very good for mining and critical minerals,” he said. “We must use it. We must improve the efficiency of our logistics system as quickly as possible to get some of these minerals out of the country and reassert ourselves.”
Jonas was at the centre of a trade and diplomatic spat between Washington and Pretoria last year. This led to him being denied clearance for a visa by the US. He now gives support to the government on high-level objectives.
South Africa has tried to deepen trade ties to Global South platforms such as the growing Brics bloc and the rest of the continent through the African Continental Free Trade Agreement, he said.
We will continue trade with the US — and even strengthen it, if the opportunity arises — but also we will ensure that we increase our trade connection with the Brics partners. We will also increase trade with Europe — Mcebisi Jonas
“South Africa must take a view that we are, in a sense, non-aligned. We are driven by our own national interests and our national interest is to promote trade and ensure there is a clear linkage between our production systems and the trade demands, and so on.
“So in that framework, we will continue trade with the US — and even strengthen it, if the opportunity arises — but also we will ensure that we increase our trade connection with the Brics partners. We will also increase trade with Europe,” he said.
Thobela Bixa, senior research analyst at Nedbank CIB, said demand and supply for copper have been balanced for years, but because of the expected growth in new demand drivers such as energy transition, AI and electric vehicles, copper demand could outpace supply before the end of this decade, driving copper prices higher.
“About 60% of copper supply comes from the African continent or South America; that’s a significant chunk of primary supply. In those jurisdictions, there are often quite high levels of disruptions happening every now and then, so it does cause a bit of a squeeze in the market where supply is constrained, but demand is still there.”
He said even under the AU banner, it would remain challenging to have consistency and uniformity of policy. Different countries are at different stages of their development and require certain things that would make it difficult for the continent to adopt blanket policies.
“However, I think around the African Continental Free Trade Agreement, there is something that could be done there, making it easy for cross-border trade of critical minerals. Furthermore, something could be done, say, around energy, which could aid production of these minerals when there is security of energy in regions which are not as energy secure.”
China’s got a significant interest in Africa because of our mineral wealth. That’s simple — and they’re not ashamed to admit it
— Mark Evans, partner at Oliver Wyman
Liesel Kassier, senior business development manager at Lyra Energy, said there was always room for Africa to recraft policy, but there is an immediate term where markets are already being affected by taxes.
“There are always political economy elements to these discussions and issues of fairness. But taking a pure business approach and a need for speed, in the case of CBAM [EU’s carbon border adjustment mechanism], it’s a good example of how quickly legislation can hit; in this case [exporters],” she said.
Mark Evans, partner at Oliver Wyman, said mobilising the African continent towards a single consistent trade strategy when negotiating with the rest of the world would be a complex endeavour due to the vast differences in priorities and development levels on the continent.
“Of our 54 different countries in Africa, I’ve worked in 22 of them. They were so different in regulation, in culture, in people, in leadership and in pretty much everything that making that happen, motivation and external interests [make that a challenge],” he said.
“There’s a lot of external interest in varying levels of external interest. And I’ll be fair here, China’s got a significant interest in Africa because of our mineral wealth. That’s simple — and they’re not ashamed to admit it.”
Tania Mandaza, vice-president for mining and metals at Stanbic Bank Zimbabwe, said Zambia and the Democratic Republic of the Congo should use their copper mines to drive the industrialisation and beneficiation agenda.
Patience Mususa, a senior researcher at the Nordic Africa Institute, said Africa was well-positioned to diversify its trade relationships in a way that ensures economic co-operation yields stronger social benefits for African communities.
