Citi South Africa MD Gina Schoeman believes that SA should negotiate an Agoa exit before we get kicked out, so we can beat investors at their rand-weakening game.
Listen to this article 6 min Listen to this article 6 min 'Our baseline view is that South Africa will exit Agoa," said local Citi MD and head of South Africa research Gina Schoeman to the surprise of no one on a recent media briefing call, doubling down with an emphatic, if unnecessary, "the consensus actually is that South Africa will exit Agoa".
While the exact timing remains uncertain, Schoeman suggested it could happen before the September deadline.
Despite the potential for US retaliation around events like the BRICS summit, she argued that from a macroeconomic perspective, the impact wouldn't be catastrophic, with Agoa exports representing "just under 0.1% of GDP" according to Citi research.
However, she cautioned about the micro-level consequences, particularly for the automotive sector, where beneficiaries are "highly concentrated".
Schoeman explained that it would be important to have exit negotiations, suggesting a "lapsed exit" to ease the transition for affected industries and considering the broader impact on "continental trade relations".
Ultimately, Citi's position is that "it's in South Africa's best interest to exit before it's asked to leave".
The age of uncertainty
This response is something previously alluded to by my colleague, Peter Fabricius, when he wrote...
