2 minute read
19 Sep 2013
12:27 pm

Red tape hampering African trade – Davies

Customs and border procedures remain a major impediment to trade between African countries, says Trade and Industry Minister Rob Davies.

FILE PICTURE: Minister of Trade and Industry Rob Davies. Picture: Refilwe Modise

In a written reply to a parliamentary question, tabled on Thursday, he said resolving so-called non-tariff barriers to trade on the continent was “slow and difficult”. One of the reasons for this was that removing these barriers required regulatory or legislative changes.

While South Africa had modernised and streamlined its customs and border procedures, these remained, together with transport-related issues and infrastructure bottlenecks, “a key challenge in the African continent”. Davies was responding to a question by United Democratic Movement MP Nqabayomzi Kwankwa, who wanted to know what steps had been taken to “reduce the red tape that is stifling trade with [Africa]”.

The minister’s response comes a month after businessman Christo Wiese, speaking to the Cape Town Press Club, repeated his call for the removal of the bureaucracy and paperwork stifling trade within the continent. Wiese, who is South Africa’s third-richest man, noted that trade among African states comprised only 15 percent of their export business.

“For the other 85 percent, we trade with the rest of the world, and not with each other. One of the major reasons for that is simply bureaucratic red tape,” he said. He then gave an example of this.

“To move a shipment of goods for [retailer] Shoprite, from South Africa to Mozambique, you have to fill in 1600 forms to cross the border. And most of those are required by the South African authorities.” Wiese has a controlling stake in Pepkor, which owns Shoprite Checkers.

In his reply, Davies also touched on tariff barriers within the Southern African Development Community (SADC), saying these had, to a “considerable extent”, been removed. “The tariff phase-down commitments have largely been implemented and almost all tariffs reached zero in 2012. Some member states are, however, not fully compliant with their commitments.”

His department was continuing its work, through SADC, to achieve full compliance. South Africa was participating in the Tripartite Free Trade Area negotiations between the East African Community, Common Market for East and Southern Africa, and SADC. These aimed to combine the markets of 26 countries, with a population of nearly 600 million, and a combined GDP of US1 trillion.