The EconomistFebruary 29th 2020 Middle East & Africa 412 tionalgrid.Manyhaveheardthatbefore.
Most importantly, Mr Mboweni out-
linedhisplantoreducethecountry’sbud-
getdeficit—forecasttobealmost7%ofgdp
nextyear.Dutiesonsomealcoholicdrinks
willincrease.Butmostofthereductionin
borrowingwillbemadebycuttingspend-
ingby261bnrand($17.2bn)overthenext
threeyears.Savingsonthewagebillare
supposedtoprovide160bnrand.
ThehopeforMrMboweniandPresident
CyrilRamaphosaisthatthesestepswillbe
enoughforSouthAfricatoavoida down-
gradethisyearbyMoody’s,theonlyoneof
thethreemaincredit-ratingagenciesnot
toratethecountry’sdebtas“junk”.
Thepresidentandthefinanceminister
muststill gettheirproposals througha
thicketofvestedinterests.cosatu, a feder-
ationoftradeunions,warnedbeforethe
budgetthatcutstomembers’paywould
mean“war”.Meanwhile,powerfulfigures
ontheleftoftheanc, suchasGwedeMan-
tashe,theenergyminister,areblockingef-
fortstoreformEskom.
MrRamaphosa isreluctantto pick a
fightwiththeopponentsofreform,partly
becausehefetishisesconsensus,butalso
becausehehasaneyeontheanc’s Nation-
alGeneralCouncilmeetinginJune.Twoof
hispredecessors,ThaboMbekiandJacob
Zuma,were“recalled”fromofficebythe
party before they had concluded their
terms.Partyinsidersbelievethattheanc’s
ruleswouldnotallowopponents of the
presidenttoousthimatthisyear’sgather-
ing.Buttheymaytrynonetheless.
Eveniftheydonottry,SouthAfricare-
mainsinperil.Thoseintherulingparty
facea clearchoice:wiseupandcutspend-
ingontheirownor,inthenottoodistant
future,dosounderthethumboftheimf. 7H
ungry americanschomping into one
of Philadelphia’s famous cheesesteaks
may soon get a taste of Africa. Last week
MeatCo, Namibia’s state-owned meat firm,
shipped 25 tonnes of beef to Philadelphia.
It was the first ever export of red meat from
Africa to the United States. Namibian meat
producers are delighted. America is the
world’s second-biggest meat market; the
average American wolfs down more than
100kg a year. Yet this is a rare success. Nego-
tiations began 18 years ago.
The shipment will be duty-free under
the Africa Growth and Opportunity Act
(agoa), which was introduced in 2000 to
boost economic growth in Africa by stimu-
lating exports to America. Yet 20 years later
only about 1% of America’s imports come
from sub-Saharan Africa, and much of that
is oil. The fact that it took two decades to
export a single piece of red meat helps ex-
plain why agoa has had so little impact,
and how it could be improved.
A few countries, including Lesotho and
Mauritius, have been given a leg-up.
Whereas most of America’s clothes im-
ports from China are hit with a duty of
about 20%, those from Africa under agoa
are duty-free. That has helped Lesotho
boost its global exports of textiles and
clothing from $143m in 2000 to $549m in- But many African countries are better
at growing things than making them. Agri-
culture accounts for 54% of employment in
sub-Saharan Africa,compared with 11% for
industry. Yet apart from a few commodities
such as coffee, tea and cocoa, agricultural
exports to America are still quite small.
Why is that?
One barrier is safety standards. Compli-
ance can be costly, sometimes entirely off-
setting the benefits of lower tariffs under
agoa. And because there is no global stan-
dard for food safety, exporters often have to
shell out to comply with different ones in
Europe and America. Harmonisation ofrules would help enormously.
agoawas meant to open America’s food
market to Africa. But while most agricul-
tural products from Africa can enter tariff-
free, the small print limits imports of much
of what the continent grows. Some crops
are still hit with import taxes. And even
though the threat to American farmers is
negligible, the United States imposes quo-
tas on imports of African products includ-
ing cotton, sugar, dairy products, peanuts
and tobacco. Processed foods that contain
milk, such as chocolate, get caught up in
these too. Imports above the allocated quo-
ta are hit with steep tariffs—350% for to-
bacco. America allocates most of its quotas
to long-standing trading partners. This
year Namibia secured a quota for its debut
shipment of beef. (Without that it would
have been taxed at 26%.) Yet its quota of
860 tonnes is tiny, amounting to just
0.008% of American beef production.
For some products African producers
are simply not competitive because of a
lack of investment, poor roads and ports
and their vast distance from rich markets.
But African companies already export far
more agricultural products to Europe than
to America, suggesting that America’s quo-
tas matter. With better access to markets,
firms might then invest more in improving
their competitiveness.
The European Union also has a prefer-
ential trade scheme for the poorest coun-
tries, called Everything But Arms. Unlike
agoa, it does not impose quotas. But it
largely rules out products if they include
too many bits and bobs made in wealthy
countries. This is a problem for manufac-
turers, which may need to import cheap
components if their finished products are
to be competitive. Worse, these rules are
“mind-bogglingly complex”, says Kimberly
Elliott of the Centre for Global Develop-
ment (cgd), a think-tank.
In Britain, too, trade with Africa is on
the agenda. Boris Johnson, the prime min-
ister, has declared that Uganda’s beef cattle
“will have an honoured place on the tables
of post-Brexit Britain” for the first time. If
Mr Johnson is serious about accelerating
imports from the poorest African coun-
tries, then he should set up a scheme that
learns from others: more comprehensive
than America’s, yet simpler than Europe’s.
In the long run, big emerging markets
may be more important to Africa. The cgd
reckons that poor countries would be able
to export three times more if they were giv-
en unrestricted access to Brazil, China and
India as well as the oecd, than if they were
given full access to the oecd alone.
Still, little can be achieved unless Afri-
can exporters take the bull by the horns and
force their way into new markets. Once
again, Namibia’s MeatCo is leading the
charge. Last year it sent the first-ever ship-
ment of African beef to China. 7One meaty success aside, farmers struggle to export to AmericaAfrican tradeAfrica’s beef with America
A fan of protectionism