The panelists at the Critical Thinking Forum held at the JSE on November 16: Dr Terence Sibiya
There is a maxim that says Africa is not for sissies. This is unfortunately the harsh reality, especially for business people involved in cross-border trade on a continent faced with serious challenges, including a dire lack of infrastructure exacerbated by miles of bureaucratic red tape.
“In southern Africa, a truck serving supermarkets across a border may need to carry up to 1 600 documents as a result of permits, licenses and other requirements,” says Anabel Gonzalez, senior director of the World Bank Group Global Practice on Trade and Competitiveness, highlighting the factors affecting intra-trade business in Africa at a conference in Nairobi last year.
“Slow and costly customs procedures and delays caused by other agencies operating at the border, such as standards, raise the costs of trading,” said Gonzalez, adding that the cost of intra-trading in Africa was the highest for any developing region in the world.
Gonzalez said as a result of this, “Africa has integrated with the rest of the world faster than with itself”.
In 2014, the United Nations magazine Africa Renewal reported in the article Intra-Africa trade: Going beyond political commitments, that 80% of Africa’s exports are shipped overseas, mainly to the European Union (EU), China and the US.
“If you throw into the mix complex and often conflicting trade rules, cross-border restrictions and poor transport networks, it’s hardly surprising that the level of intra-Africa trade has barely moved the needle over the past few decades.”
Sadly, the trend continues. Last week, Group chief executive of the Gauteng Growth and Development Agency [GGDA] Saki Zamxaka told the Mail & Guardian Critical Thinking Forum in Johannesburg that intra-trade in Africa amounted to a paltry 11% in 2015.
Zamxaka, whose organisation has the challenging task of attracting investment to Gauteng province, said the GGDA has its sights on helping to grow intra-Africa trade. In 2015, the GGDA engaged more than 25 African embassies and hosted 16 international delegations jointly with other African agencies “to explore areas of mutual benefit to our business communities”.
The GGDA cites Africa as “the most important export destination for Gauteng and South Africa, followed by the EU, China, US and India in that order”.
But Zamxaka is not ignorant of the challenges. He said visa requirements from country to country are a “nightmare”, but said intra-Africa trade remains a priority for the GGDA. Last year the department of home affairs introduced stringent visa requirements in a bid to curb child trafficking, but these ended up having an adverse impact on tourism. The regulations were eventually amended in October, following a huge outcry from the tourism sector.
Dr Henry Wanyama, head of economics at the Pan African Chamber of Commerce, cited as an example the fact that it is more expensive to import maize from Zambia to South Africa than it is to import Brazilian maize, as one of the impediments to intra-African trade. Wanyama said there is a serious and urgent need for change.
“We have to change the way we do things. We are stuck,” he told the forum, on the continued blaming of Africa’s failures on the legacy of colonialism.
Wanyama said there are many opportunities in Africa that have not been exploited, including the fact that Africa has always produced its own food, which is also not genetically modified.
“We consume a lot and produce nothing. Why are we not taking the opportunity to produce what we have always produced? We are suffering food insecurity despite the abundance of [natural] resources,” he said.
“We must get our act together and produce something that we can take to the global market. Why has Africa not even produced its own bicycle [since independence in the 60s]?”
Wanyama argued that the US was once a British colony but came up with a plan to eliminate the negative impact of colonialism, and hardly ever harks back to this for its economic failures and shortcomings.
“Instead of going forward we remind ourselves of things that hold us back. As a people are we going to continue being cry-babies? Very poor people would rather fight among themselves than fight an enemy. Nobody is going to come and help Africa. We need to help ourselves.”
What does the GGDA do?
Gauteng Growth and Development Agency chief executive Saki Zamxaka explains that the GGDA’s programmes entail initiating and being the project manager of key projects focused on:
– Revitalising township economies;
– Supporting and growing the identified sectors;
– Building new, smart knowledge-based industries;
– Ensuring energy security, environmental sustainability and efficient use of existing resources;
– Supporing the provision of strategic economic infrastructure;
– Facilitating and implementing combined and aligned initiatives with national and local government;
– Fuding strategic key projects such as those mentioned above, and especially strategic infrastructure projects;
– Promoting domestic and foreign investment into the key projects and focus areas of the province; and
– Being an analyst of key economic and sectorial data (business intelligence).