3. • Combined population of 273 million consumers
• 9.8 million km2 surface area – roughly the same
as China or US
• Dynamic growth area in time were West is
stagnating
• From 2000-2010 GDP in the region grew by 45%
• Mineral resource deposit significant with new
finds in Mozambique, Tanzania, Malawi
• Water rich countries like Lesotho, Zambia
• South Africa dominates
4. ž In comparison to N and W-Africa, quite small
ž DRC and Madgascar has French connection
(Seychelles and Mauritius)
ž Physical Embassies throughout Southern Africa
with dedicated economic relations departments
in South Africa, Mozambique and Angola
ž Mozambique –
• investment of around €1 million per annum with a total
stock of €9 million
• 21 Companies with 10,000 employees in primary sectors,
services (Bureau Veritas, Sofreco), energy (Total),
construction (Razel, Soletanche Bachy) and engineering
(Alstom)
5. ž Angola –
• Trade balance in favour of Angola: France
imports large amounts of oil and little else
• Exports from France also largely for oil industry
and some household products
• France third largest investor in Angola in
agriculture, services, pharmaceuticals and oil
• French companies employ around 20,000
workers
6. ž South Africa
• Largest and most diversified presence
• France is ranked as the 9th largest investor in
South Africa, with
• 203 French companies with 29 000 employees
• investment value of €1,3bn
7. ž Low levels of trade
• Africa accounts for <2.5% of world trade
• Intra-Africa trade is low: only around 10-12% -
compared to EU of around 60%
ž Africa
relies heavily on exports of
commodities
• This reliance has led to debt crisis and poor income
distribution
• Need diversified opportunities to trade, profit from
larger markets
ž 7
African countries in bottom ten most
restrictive trade regimes
8. ž Economic scene dominated by
• Large companies – sustained and inclusive
growth, employment should come from SMME’s
– Trading environment difficult for small operators
• South Africa –
– Retail, another important growth and employment
sector is dominated by SA companies: Shoprite,
Game, Woolworths change in operations
– Services: Banking – Standard Bank, Communications
ž Construction
contracts predominantly
won by Chinese firms in recent years
9. ž Other success areas include SAB Miller,
British American Tobacco, Distell, SAA
ž South African dominance is such that
even successful regional companies
relocate to make use of value-chains,
markets, distribution networks
• Windhoek Lager
ž Yet
increasingly facing competition from
Brazil, Russia, India, China (BRIC) nations
10.
11. ž Sinceend of apartheid countries unified in
Southern African Development Community
(SADC)
ž 15 Member States, but Madagascar
suspended
ž Why Regional Integration?
• Overcome problem of small markets, political
fragmentation, huge cost of infrastructure
development, policy lock-in effect
ž Model
integration on European Union
example of linear integration
• From free trade area to political union (?)
12.
13. ž Free Trade Area – remove tariffs on
significant amount of products between
parties, maintain external tariffs (2012)
ž Customs Union – remove internal border
controls and only have one set of tariff
codes for all countries (2015)
ž Common Market – unified standards and
practices, labour mobility(2016)
ž Monetary Union – Common currency (2018)
ž Sovereignty ceded to regional authority at
each step
14. ž Currently excludes DRC, Angola,
Seychelles and Madagascar
ž 85% of tariffs were liberalised in 2008,
moving closer to 95% coverage by end
last year
ž Number of exclusions remain
ž Advantages in import to South Africa –
markets where overlap like Tanzania and
Kenya
15. ž Advantages in export where market
share competes with East African
produce
ž In theory this should apply to Asian
competitors but in general terms Asian
countries hold price advantage despite
tariff advantage
ž SADC FTA progress in increasing trade
but not enough to ensure movement of
goods
16. ž Five
countries in SADC belong to a
customs union
• South Africa, Botswana, Lesotho, Namibia and
Swaziland
• Overhang from colonial times
• South Africa collects customs revenue and
shares all between BLNS
– Effectively development assistance
– If expanded the BLNS are sure to lose out
– Lesotho, Swaziland resource 50% of fiscal income
ž Real agenda of SADC?
17. ž Realisiticwithin Southern and Eastern
African context
ž South Africa increasingly leaning towards
postponing further integration in favour
of another bigger FTA with East Africa
• Tripartite FTA – as it will include all states in
COMESA and East African Community
• 26 States = free trade from Cape Town to Cairo
ž BUT it is not enough to bring tariffs down
• Enforcement not effective without regional court
18.
19.
20. ž Poor infrastructure
ž Lengthy waiting times at borders
ž Corruption
ž Non Tariff Barriers – very difficult to
monitor and control
ž Insurance
ž Financing
ž Poor consumers
ž Dominance of South African retail stores
21. ž Many focus on trade facilitation in order
to increase SADC trade
ž Focus on reducing complexity and cost of
trade transaction in order to increase
efficiency, transparency and
predictability of trade but to maintain
government control where necessary
ž It costs $5000-$8000 to ship a 20ft
container from Durban to Lusaka but only
$1,500 to ship from Japan to Durban
22. ž Only so much that can be achieved on
policy level
ž Trade facilitation next step towards
increasing intra-regional trade
ž Donors and governments have adopted a
corridor approach towards trade
facilitation
ž North-South corridor – connecting
Eastern states to Durban and Dar es
Salaam Ports and develop Maputo
23.
24. Corridor Management Committees: Transport
Corridors have their own management structures that are
usually established through a MoU between the countries Ethiopia
-‐
Djibou?
the corridor transits through. Efforts are being made to
“cluster corridors and to manage the corridors in clusters.
Northern
EAC Cluster
Western Cluster Central
Dar
es
Salaam
Malanje
Lobito-‐Benguela
Namibe
Nacala
Trans-‐Caprivi
Trans-‐Cunene
Beira
North-‐South
Trans-‐Kalahari
Maputo
Eastern
Cluster
N-S Cluster
25. Focus Areas and Corridors along the top
Corridor Layers
Click on a
road section
31. OSBP – On-going work at Chirundu Border Post
Chirundu can be said to be now truly
operating as a OSBP. Have been challenges
(such as how to address transit fraud) but
procedures now signed off so out-standing
issues (signage, additional training, fibre
across bridge, preparation of a performance
charter and final modifications to buildings)
Journey times on NSC typically 1/3 driving and 2/3 waiting. Most effective
can now be completed.
way to reduce costs is to reduce waiting times at borders. This can be
done by converting to OSBP but need to address: physical facilities
(common control zone with a fenced perimeter, common facilities –
scanning, weighbridges and inspection bays); operations and training;
and legal framework (extraterritorial jurisdiction).
32. Border Crossing Monitoring:
Have relatively sophisticated border
monitoring processes based on a GPS truck
tracking system. The system tracks “queuing”
times as well as border clearing times.
35
32
32
32
30
30
28
28
25
25
24
23
23
21
21
20
15
10
5
0
juil.-‐07
août-‐07
sept.-‐07
oct.-‐07
nov.-‐07
déc.-‐07
Avg
hours
to
cross
from
Zimbabwe
to
Zambia
Avg
hours
to
cross
from
Zambia
to
Zimbabwe
33. Border Crossing Time reduced by Nr of Vehicles increased by 2/3
>1/3
65%
36%
Note: Before December 2009, average border crossing time was between 72 and 120 hours
36. ž Exisiting surveys from many
organisations, including World Bank, but
no accessible case studies
ž Developed a list of barriers from
exisiting work and validated against firm
level interviews
ž 50 Case studies in 10 countries (+Moz)
ž Initial findings show correlation but with
striking differences
37. All
Access
to
Finance
9%
Customs
RegulaGons
29%
Infrastructure
27%
CorrupGon
11%
Skilled
Labour
Inefficient
13%
Bureaucracy
11%
SAIIA
43. ž Of the opinion that if corruption could be
done away with, the other barriers would
automatically resolve themselves
ž Customs clearance – three advantages in
DFZ
• Special lane at border
• Customs officials visit on site
• Limited paper work due to duty exemption
ž Infrastructure
• Government has invested in ports in order to satisfy
demands/needs of oil and aluminum companies
44. ž Infrastructure
• Don’t make much use of the roads
• Ample electricity, water
• Additional oil, gas and coal finds might
overburden existing ports
ž Banking
• Despite or perhaps due to large figures involved
they’ve not had any difficulty in moving funds in
or out of Mozambique
ž Message – it pays to be big
• Also evident from other case studies
45. ž Weighbridges most often mentioned as
significant NTB
• Readings differ, payment options limited, no security
for trucks
• Roadblocks – unpredictable, have to plan ahead to
be corrupt
ž Labour market – permit system
• Mozambique very clear and efficient system
• Other end of the scale – large sums but no pos result
• Large companies rotate staff globally for skills
training, but very difficult in Southern Africa
46. ž E-platform – recent introduction in SA
• Welcomed by Road Freight Association
• E-platforms frequently mentioned as solution to
delays and corruption
• BUT e-platform seems to have added to delays
– Border officials still want to the paperwork
– Infrastructure at borders problematic
ž Paperworkfor mixed consignment of
fresh produce easily a foot deep
47. ž Size matter as larger companies can
outsource logistics, customs clearance or
appoint in-house expertise
ž Hierarchy of stumbling blocs associated
with development
• Banking, access to forex important barriers in
DRC, Malawi not so in South Africa rest of SACU
• Corruption headache for South Africans wanting
to do business in DRC, for DRC locals accepted
as normal costs associated with doing business
48. ž For SACU companies, greater focus on
efficiencies and predictability
ž Infrastructure in Southern-SADC has
improved dramatically,
• only mentioned in context of physical border
infrastructure
ž North
still lagging far behind and
weather dependent
• Time to get goods across borders and to point of
sale varies from shipment to shipment
49.
50. ž PS interesting position: beneficiary,
implementor, driver, stumbling block
ž Very limited engagement at the regional
level
ž National engagement as well as bilateral
• Mixed results
ž Exception is telecommunications that has
effective tool in CRASA
• Again, it pays to be big, telecom huge tax revenue
and profits, mutual benefit in engagement
51. ž SADC-wide business visa
ž More effective SADC e-platform that
gives regular updates on tariffs, excise
and other developments
ž SADC Rules of Origin certificates to
become more easily obtainable
ž Uniform regional weighbridge system
and clearance
52.
53. ž Where does it leave companies in SA
wanting to trade with neighbouring
states?
• Western Cape well placed ito access to
Mozambique
• Retail sourcing practices in local agriculture
beneficial
• Growing middle-class in SADC means increased
wine sales
• Cape Town Port industry missing out vis Maputo,
Dar es Salaam, Walvis Bay, Luanda
54. ž Small companies
• Know the risks – waiting times, corruption, NTB’s
• High risk, high reward?
• Feed into value-chain of larger operators
• Participate in regional forums for private sector
• Read www.thetradebeat.com - research findings
• Report NTB’s – www.tradebarriers.org
• Subscribe to TMSA newsletter
55. News Feed
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stressed
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ore projects
> Mauritius: private sector competitiveness project
> Mozambique: agriculture development project
> IMF report on options for Swaziland
> AfDB: Malawi country strategy paper 2013-2017
>
India-SACU trade pact may be restricted to a few
products
> Trevor Manuel: Africa and the European financial crisis
> Namibia: Big year ahead for Trade
> Botswana's "diamond" trade deficit
Ø UK backs fair business practice for Africa
