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Sep 10, 2012

Trade facilitation to open up Africa’s potential - Davies

Johannesburg|Africa|Building|Industrial|Systems|transport|Africa|Asia|USD|Gross Domestic Product|Inadequate Infrastructure|Logistics|Services|Systems|Transport Services|Erich Kieck|Infrastructure|Rob Davies|Eastern Africa|Southern Africa
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Africa’s economic potential as the next leading source of global economic growth could remain unfulfilled if the barriers to international and inter-regional trade were not addressed, Trade and Industry Minister Dr Rob Davies said on Monday.

Speaking at the Southern Africa Trade Facilitation conference, in Johannesburg, he pointed out that, despite Africa’s position as the second-fastest growing continent after Asia, inadequate infrastructure, the limitations of small and fragmented markets and the inadequate diversification of industrial structures, were responsible for the low levels of trade.

The World Bank’s ‘Trading Across Borders’ indice ranked Southern African countries in the lowest quartile, ranking between 136 and 164, among 183 countries.

The high costs and lengthy duration of movement of goods over Southern African borders, which reduced commerce and industry competition and discouraged trade, needed to be mitigated through efficient trade facilitation and cost-effective transport services, logistics and customs reforms.

Davies commented that the Southern African Development Community (SADC) free trade agreement (FTA), which was expected to be implemented this year, would boost inter-regional trade, as almost all tariff lines would be duty-free.

The SADC FTA, incorporating the East African Community and the Common Market for Eastern and Southern Africa, would extend through 26 countries, comprising a combined population of 600-million, and open up markets reaching a gross domestic product (GDP) of about $1-trillion.

The SADC FTA could also form the basis of an Africa-wide FTA, which would, besides others, open a market reaching a GDP of $6-trillion, deal with the small and fragmented economies in Africa, enhance the interest in foreign investment in Africa and further boost trade.

World Customs Organisation capacity building director Erich Kieck commented that the trade constraints could also be mitigated through the implementation of trade facilitation tools, such as the national single window (NSW), customs connectivity, coordinated border management (CBM), one-stop border posts and customs modernisation tools.

The NSW would connect trade-related stakeholders within a country to a single electronic data information exchange platform, while customs connectivity would link the customs management systems of countries to each other. CBM would see greater coordination between border management agencies to improve efficiency and effectiveness.

Edited by: Mariaan Webb
Creamer Media Senior Researcher and Deputy Editor Online
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