http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 17.17Change: -16.99
R/$ = 14.94Change: -14.79
Au 1282.15 $/ozChange: 4.03
Pt 1060.00 $/ozChange: 5.50
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Letters About Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Aug 10, 2012

Barriers to intra-African trade

Back
Africa|Business|Development Bank|Environment|Finance|Gas|Mining|Oil-and-gas|SECURITY|Sustainable|Africa|Nigeria|South Africa|Zimbabwe|Oil And Gas|Quate Infrastructure|Trade Finance|Infrastructure|Pamela Wadi
Africa|Business|Environment|Finance|Gas|Mining|Oil-and-gas|SECURITY|Sustainable|Africa||Oil And Gas||Infrastructure|
africa-company|business|development-bank|environment|finance|gas|mining|oilandgas|security|sustainable|africa|nigeria|south-africa|zimbabwe|oil-and-gas|quate-infrastructure|trade-finance|infrastructure|pamela-wadi

By: Pamela Wadi

Africa’s economic outlook has positively transformed in recent years. Interna- tional organisations such as the African Development Bank are expecting the continent’s average rate of growth to exceed 5.8% in 2012 alone.

However, trade between countries in Africa has not seen a corresponding increase. As a result, there have been various calls by governments, trade organisations and international finance houses to address this issue, which is key to boosting and sustaining economic growth in the region.

A company looking to expand into the rest of Africa needs to adapt its business model to effectively mange the nuances that exist between the 54 differing markets. Some of the challenges to intracontinental trade are well known and include the complex bureaucratic processes in each jurisdiction, a lack of ade- quate infrastructure, regulatory issues and difficulty in accessing trade finance.

However, it is also critical that decision- makers consider important issues such as choos- ing the right route to market, ensuring security of tenure and the social licence to operate, as well as adhering to local-content requirements.

Accessing the right route to market in another African country often exposes companies to political risk issues that are unique to the host country. In many jurisdictions, governments and political actors maintain significant influence over the private business sector. This means that foreign companies often interact with and enter into joint venture partnerships with State-owned entities. At times, these joint venture partnerships are used as vehicles by members of the ruling elite for personal benefit. This can expose foreign companies to allegations of corruption and influence peddling and conflict of interest, which can have serious reputational and legal implications.

Understanding the political climate of the jurisdiction a company chooses to enter is important when a local company forms its strategy to do business in the rest of Africa. Changes in the political scene of the host country can have a dramatic impact on the operating environment for foreign companies. Laws and regulations can change suddenly in the more volatile jurisdictions, which can affect the security of assets on the ground. Concerns around security of tenure serve as a deterrent to investing in neighbouring companies by local companies, particularly in capital- intensive sectors like mining and oil and gas.

Calls for nationali- sation across the continent speak to the depth and breadth of African economic transformation. Increasing indigenisation across the continent, seen, for example, by South Africa’s broad-based black economic-empowerment initiatives, Zimbabwe’s empowerment policies, as well as Nigeria’s local-content requirements, means that foreign companies are increasingly obligated to take on local partners, and choosing the right one represents a further challenge to local companies keen to conduct business in other African jurisdictions.

In this increasingly complex and competitive investment climate, sustainable economic growth across Africa hinges on developing trade between countries in the region. Hence, a full understanding of new markets and the contexts of unfamiliar territories by companies looking to do business in the rest of Africa is invaluable if this is to come to fruition.

Wadi is a senior consultant for global risk consultancy Control Risks.

Edited by: Creamer Media Reporter

To subscribe email subscriptions@creamermedia.co.za or click here
To advertise email advertising@creamermedia.co.za or click here
 
Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other News This Week News
The two spent-fuel pools at Eskom’s 1 800 MW Koeberg nuclear power station, in the Western Cape, will be full by 2018, increasing the urgency on the State-owned utility to begin pursuing alternative storage options. Koeberg has, over the past 32 years, accumulated a...
South Africa lacks the skills necessary to implement the government’s plan to build 9.6 GWe of new nuclear energy capacity, warns nuclear-qualified Quality Strategies International CEO David Crawford. “Apart from the concern about the affordability of the programme,...
DOROS HADJIZENONOS The 700-series devices provide network security monitoring, app control, URL filtering, VPN security, antivirus, antispam, antibot, and advanced intrusion prevention and detection functionality
Cybersecurity multinational Check Point has released its latest 700-series cybersecurity systems for small businesses, which draw on its international threat intelligence to provide up-to-date cybersecurity, says Check Point South Africa country manager Doros...
More
 
 
Latest News
Brenda Berlin
Platinum mining company Impala Platinum (Implats) has secured a court order against a US platinum recycler, from which it is claiming $201-million. Implats said on Wednesday that the order, issued by the US District Court for the Eastern District of Pennsylvania,...
Andrew Hinkly
A potentially far-reaching step has been taken towards the viable roll-out of hydrogen refuelling infrastructure for platinum-using fuel cell electric vehicles (FCEVs) with the launch of a system that allows hydrogen to be stored and transported in conventional fuel...
Johannesburg mayor Parks Tau
At least R14-billion in investments had seen the economic development of the City of Johannesburg, resulting in economic hubs that created jobs and further opportunities for the city’s citizens, mayor Parks Tau said on Wednesday. The city had begun redesigning the...
More
 
 
Recent Research Reports
Energy Roundup – May 2016 (PDF Report)
The May 2016 roundup covers activities across South Africa for April 2016 and includes details of the National Energy Regulator of South Africa’s proposal to introduce a coal benchmark cost as part of its final decision on Eskom’s multiyear price determination...
Automotive 2016: A review of South Africa's automotive sector (PDF Report)
Creamer Media’s Automotive 2016 Report provides an overview of South Africa’s automotive industry over the past 12 months. The report provides insight into local demand and production, vehicle imports and exports, investment and competitiveness in the sector, as well...
Energy Roundup – April 2016 (PDF Report)
The April 2016 roundup covers activities across South Africa for March 2016 and includes details of a North Gauteng High Court Judge’s dismissal of a court application to postpone the 9.4% electricity tariff increase, which the National Energy Regulator of South...
Electricity 2016: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2016 report provides an overview of South Africa’s electricity sector, focusing on State-owned power utility Eskom and independent power producers, electricity planning, transmission, distribution and the theft thereof, besides other issues.
Energy Roundup – March 2016 (PDF Report)
The March 2016 roundup covers activities across South Africa for February 2016 and includes details of the Department of Energy’s plans to announce the preferred bidders for the first tranche of the coal independent power producer procurement programme; the Council...
Steel 2016: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2016 Report examines South Africa’s steel industry over the past 12 months. The report provides insight into the global steel market and and particularly into South South Africa’s steel sector, including production and consumption, main...
 
 
 
 
 
This Week's Magazine
The two spent-fuel pools at Eskom’s 1 800 MW Koeberg nuclear power station, in the Western Cape, will be full by 2018, increasing the urgency on the State-owned utility to begin pursuing alternative storage options. Koeberg has, over the past 32 years, accumulated a...
South Africa lacks the skills necessary to implement the government’s plan to build 9.6 GWe of new nuclear energy capacity, warns nuclear-qualified Quality Strategies International CEO David Crawford. “Apart from the concern about the affordability of the programme,...
DOROS HADJIZENONOS The 700-series devices provide network security monitoring, app control, URL filtering, VPN security, antivirus, antispam, antibot, and advanced intrusion prevention and detection functionality
Cybersecurity multinational Check Point has released its latest 700-series cybersecurity systems for small businesses, which draw on its international threat intelligence to provide up-to-date cybersecurity, says Check Point South Africa country manager Doros...
Daimler Trucks and Buses Southern Africa (DTBSA) saw a marked slip in new-vehicle sales in 2015 compared with 2014, with sales dropping from 5 897 units to 5 300 units. The decline came as the South African new truck and bus market declined from 31 558 units in 2014...
Group of 20 (G-20) economies threatened to penalise havens that don’t share information on their banking clients after the leak of the Panama Papers provoked a global uproar over tax evasion. The G-20 will consider “defensive measures” against financial centers and...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks
Subscribe Now for $149 Close
Subscribe Now for $149