Africa needs to increase its trade and investment ties with the United States by reducing barriers to trade on the continent and the cost of doing business.
Standard Bank Group CEO Sim Tshabalala spoke to CNBC Africa about the need to encourage American trade with Africa and investment on the continent.
Standard Bank is one of the sponsors of the US-Africa Business Summit, which aims to facilitate engagement between US corporates and African business leaders and government ministers.
The summit focused on reducing barriers to trade and investment between the United States and the continent.
Tshabalala said there are vast opportunities for African states and corporates to grow their relationship with US companies and governments.
Africa’s trade with the United States is disproportionately small compared to the size of the US economy.
For example, trade between Africa and the European Union totalled $316 billion in 2022, while the continent’s trade with the US was around a meagre $50 billion.
Tshabalala said this figure should be much higher, with over 1,000 US companies operating on the continent.
The CEO of Africa’s largest bank by assets spoke to African ministers during the Summit about engaging US companies to invest in their countries.
Tshabalala sees it as the bank’s job to facilitate the flow of capital into Africa, with Standard Bank having personnel in major financial hubs such as New York and London.
However, he said the continent must make it easier for companies to invest and trade with Africa and within African states.
African leaders must lower the cost of doing business within their countries and ensure that foreign companies are not prohibited from doing business on the continent by onerous regulations.
In particular, African governments must reduce tariffs on goods and services, minimise non-trade barriers, and tackle corruption.
Tshabalala’s comments came while a South African government delegation embarked on a charm offensive in the US to defuse tensions with the country’s second-largest trading partner over its foreign policy.
Finance Minister Enoch Godongwana and Trade Minister Ebrahim Patel are among those who plan to meet with US lawmakers and lobby for South Africa to retain its eligibility to export goods under the African Growth and Opportunity Act.
The officials want to dispel what the government has termed misinformation about its stance toward Russia’s war in Ukraine.
Several US lawmakers have called on President Joe Biden’s administration to reconsider whether South Africa should continue to benefit from AGOA.
AGOA expires in 2025, and US officials have previously said the qualifying criteria may be revised or the program may be replaced.
South Africa ships cars and agricultural produce to the US under the accord. Last year, it exported $2.7 billion worth of goods using AGOA.