Auto Sector's Cautious Optimism for AGOA Continuation – Renai Moothilal NAACAM

The 40th forum of the African Growth and Opportunity Act (AGOA), which offers duty-free access to the United States economy for 20 African countries, has concluded and appears that concerns about South Africa potentially losing its benefits due to the 'Lady R' diplomatic spat and its support for Hamas and Iran have abated. South Africa is advocating for an early 2024 renewal of AGOA in the U.S. Congress, as the current agreement is set to expire in September 2025. In an interview with Biznews, Renai Moothilal, the CEO of the National Association of Automotive Component and Allied Manufacturers (NAACAM) said while it is challenging to predict the outcome until a formal announcement by the U.S. Congress, a strong case has been made for the continuation of AGOA. Moothilal said the automotive industry plays a significant role in the South African economy contributing to 5% of GDP and employing 110,000 people primarily in component manufacturing. AGOA, he said, is vital for the industry’s competitiveness and ability to maintain volume. Moothilal pointed out that South Africa exports a substantial number of vehicles and components to the U.S., which accounted for R24 billion in exports last year. He explained that South Africa contributes less than 1% to global auto production and it can't afford to lose any markets, making AGOA crucial for the sector's growth. Commenting on the global shift to electric vehicles (EVs) he said that component manufacturers are already adapting to technology changes and are prepared for the shift to EVS.