Latest / Anele and the Club on 947 / The Money Minute with Zinathi Gquma: What South Africa’s AGOA exclusion means for small businesses in the export value chain

Transcript

The Money Minute with Zinathi Gquma: What South Africa’s AGOA exclusion means for small businesses in the export value chain · Anele and the Club on 947

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  Speaker 1: The Money Minute. On Anele and the Club.
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  Speaker 2: On 947. And this Money Minute is brought to you
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  Speaker 2: by Standard Bank Business and Commercial Banking.
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  Speaker 1: Right here on 947.
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  Speaker 2: You know your business, but a fresh perspective could help
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  Speaker 2: you spot your next opportunity. Stay tuned for expert insights.
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  Speaker 2: Standard Bank Business and Commercial Banking. Real growth begins here.
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  Speaker 2: And our money lady, Zinati Koma, in studio.
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  Speaker 1: Thank you so much. Yeah, good to be back.
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  Speaker 2: Just quickly, what's your money lending policy for family?
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  Speaker 3: For family, I only lend to my mom and my brother.
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  Speaker 3: But it's that kind of lending where you know, we
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  Speaker 3: all know it's a gift.
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  Speaker 2: Okay.
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  Speaker 3: So to the point where my mom doesn't even ask
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  Speaker 3: to lend anymore.
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  Speaker 1: She just tells me her problem. And she just waits
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  Speaker 1: for me to say, okay, I'm sending. I'm sending. Yeah, literally.
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  Speaker 1: I'm giving this to you.
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  Speaker 2: So the entire country, money-wise, economy-wise, a bit.
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  Speaker 1: Of a wobble.
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  Speaker 2: The fact that the USA has cut... you know the
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  Speaker 2: deal that we had with them AGOA what.
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  Speaker 3: Does AGOA stand for the African Growth and Opportunity Act
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  Speaker 3: okay so they've kicked out South Africa and Rwanda but
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  Speaker 3: of course we're focusing now on South Africa and this
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  Speaker 3: is a blow to South Africa or should I say
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  Speaker 3: we're in the dwang we're in the.
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  Speaker 1: Dwang Because the U.S.
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  Speaker 3: Is South Africa's third biggest trading partner following the European
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  Speaker 3: Union and China. And AGOA allowed over 1,800 products to
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  Speaker 3: be sold that are made in South Africa.
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  Speaker 1: To be sold to the U.S. tariff free.
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  Speaker 3: This means that South African companies did not have to
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  Speaker 3: pay the tax that companies usually have to pay to
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  Speaker 3: have access to the U.S. to another market, right? And
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  Speaker 3: these products come from important sectors in South Africa, such
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  Speaker 3: as the automotive sector and the agricultural sector, particularly looking
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  Speaker 3: at citrus and wine.
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  Speaker 2: But.
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  Speaker 1: As much as.
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  Speaker 3: This is what we're looking at, we're not necessarily looking
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  Speaker 3: at the implications on economic growth because that is expected
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  Speaker 3: to be limited.
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  Speaker 1: But what we are.
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  Speaker 3: Looking at is the profit and job pressures that could
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  Speaker 3: come from these specific industries. So how this now translates
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  Speaker 3: to small businesses.
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  Speaker 1: In South Africa, right, is that.
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  Speaker 3: As a small business, you don't necessarily have to be
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  Speaker 3: a direct exporter of those products to America.
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  Speaker 1: But you supply the.
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  Speaker 2: Bigger companies who supply to America.
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  Speaker 1: Exactly.
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  Speaker 3: For example, a big car company that makes cars in
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  Speaker 3: South Africa, you could be a small business that's supplying
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  Speaker 3: tires or batteries or any other products and services to
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  Speaker 3: that company then that ends up exporting to America, right?
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  Speaker 1: So now, because of the higher tax.
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  Speaker 3: The companies then that export these products will have to
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  Speaker 3: pay the higher tax, the tariff, because obviously we now
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  Speaker 3: come from tariff-free. Now we have to pay these tariffs.
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  Speaker 3: It's either these companies absorb those tariffs where they don't
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  Speaker 3: have to increase their prices to the American consumers or
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  Speaker 3: they actually have to pass those costs on to the
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  Speaker 3: American consumer.
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  Speaker 1: This makes us now less competitive.
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  Speaker 3: So other companies from other countries that are under AGOA
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  Speaker 3: now can sell their products cheaper to the American market.
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  Speaker 1: This does not mean, though, that it is the end
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  Speaker 1: of the world as much as it is a challenge.
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  Speaker 3: South Africa has been expanding and diversifying its exports to
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  Speaker 3: other countries outside of America because this has been a
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  Speaker 3: difficulty for a long time. I do also note that
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  Speaker 3: Standard Bank in that endeavor is a very important connector
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  Speaker 3: because this week they sent 20 businesses across seven African
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  Speaker 3: countries to China.
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  Speaker 1: To meet up.
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  Speaker 3: These are companies that export to China to connect them
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  Speaker 3: with Chinese buyers. But there's also the opportunity for businesses
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  Speaker 3: in South Africa to sell to other African countries on
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  Speaker 3: the continent. So as much as there is this challenge,
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  Speaker 3: there are also still opportunities that we can exploit.
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  Speaker 1: I know I'm being dubious here, but can't we just.
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  Speaker 2: Give our stuff to another country.
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  Speaker 1: No, but that's what's happening. That's under the AGOA. And
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  Speaker 1: then they do it. Just a double up. You know
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  Speaker 1: what I'm saying? I see what you're saying. We're like
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  Speaker 1: AO Kenya. We slip it through. Here we go. I'm
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  Speaker 1: going to pose this to Box Tao. I really think so.
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  Speaker 2: Because we still need to move our product.
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  Speaker 1: Come on, guys. Oranges grown in South Africa assembled in Kenya.
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  Speaker 2: Yeah.
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  Speaker 1: What did Thabo Mbeki say? I am an African.
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  Speaker 2: Exactly.
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  Speaker 1: That better kick in right now.
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  Speaker 2: The Money Minute brought to you by Standard Business and
• 4:28
  Speaker 2: Commercial Banking. By the time December comes around, even the
• 4:30
  Speaker 2: office printer is tired of working. And if your business
• 4:33
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• 4:36
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  Speaker 1: the tricky part?
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  Speaker 2: Your business doesn't stop growing just because your resources need
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  Speaker 2: a breather. Whether you need bigger office space, new equipment,
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  Speaker 2: banking has a range of lending solutions that could help
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  Speaker 2: you keep things growing.
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  Speaker 1: So, search Standard Bank Business.
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  Speaker 2: And Commercial Banking because it's where real growth begins. Standard
• 4:59
  Speaker 2: Bank is an authorized and registered credit provider.
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  Speaker 1: T's and C's apply.