Deputy Chairperson, hon members, the question is about the impact of the African Continental Free- Trade Area, particularly focused on manufacturing. I want to start by saying that the African Continental Free-Trade Area is really potentially the big storyline for the African continent. It will open up export markets for our South African firms, Nigerian firms, Ethiopian firms, Zambian firms and scale up production. This has been the continent that has not industrialised to the level that our people need.
South Africa is already a significant exporter of manufactured products to the rest of the continent. In fact, some 250 000 South African jobs are dependent on what we sell to the rest of the continent. We sell a number of different products. In fact, I have
looked at the list recently and hon members may be interested if I share with you the top-10 list of products that we sell to the rest of the continent.
In the number-one category is trucks and bakkies, followed by cars, industrial machinery like cranes, iron and steel structures, fuel pumps for cars, parts and accessories for tractors and trucks, mining machinery, medicines, loaders and construction vehicles and tires.
In fact, if we look at the export profile of the continent, you will see that South African goods constitute a very significant part of it. About 23% of all the trade that African countries have with each other originates from South Africa. We either import or we export. So, we are a key driver of Africa's manufacturing profile.
In the period of concluding the African Continental Free-Trade Area, we have worked very, very strongly on the second part of the question, which is how to make sure that the goods are in fact goods that are made on the African continent. There are two ways in which we do it. The first is, what we call, the rules of origin. So, if I take this suit that I am wearing, what gives us the right to say that it is made in South Africa? If it is not made in South Africa
... Let us say, it is made in China, it cannot benefit from the African Continental Free-Trade Agreement. So, it only benefits if it is certified made in South Africa. If this suit is sent to South Africa without the buttons and the buttons are sewn on, does it make it, made in South Africa? If it is sewn in South Africa, but all the material has been made elsewhere in the world, like the buttons, the fabric, the lining and so on, is it made in South Africa?
Rules of origin look at that. We have reached agreement on rules of origin for most products except clothing and textiles, sugar, the auto sector - auto parts - and one or two other smaller products. We are now focussed on getting that resolved and we hope by February next year, to have a full agreement on all the products and their definition under the rules of origin.
Secondly, we have customs administration. It is when companies put forward an invoice that says that something has been made in factory X in country Y. We need the customs capabilities to be able to check that invoice and documentation and ensure that it is legitimate and that there is not false invoicing or underinvoicing.
So, a big part of our work with the South African Revenue Service recently has been to see how we can support efforts by Sars, to
scale up its capacity in anticipation of this free-trade agreement. So, to summarise the big drive of the African Continental Free-Trade Area is in fact to help industrialise the African continent. The challenge or the risk that we face is that there can be significant customs fraud that will undermine our efforts. So, we made that a big focus of our work on the African Continental Free-Trade Area Agreement. Thank you.
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