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17 Oct 2014 00:00
For years it has been impossible to get a reasonable estimate of South Africa’s exports and imports to and from its South African Customs Union (Sacu) neighbours – Botswana Lesotho, Swaziland and Namibia, the so-called BLNS. (Delwyn Verasamy, M&G)
Some numbers do make people and countries change their way of thinking about their relations with other people and themselves.
Take the gross domestic product (GDP) of China compared with that of the world’s number one economy, the United States, for example.
Economists have spent the past few years speculating on the day when China, with its fabulous rates of GDP growth, will finally resume its rightful place as the world’s biggest economy, which it was for many centuries, until European, Japanese and American colonialism systematically plundered the country in the 19th century.
When that day comes, sometime between 2020 and 2030, the US will become something that is not part of its national psyche – it will become number two.
In Africa, we have had the same situation with South Africa and Nigeria. For years, South African officials and politicians, as well as the public, whether under apartheid or under democracy, took for granted that their country was number one in Africa and that anyone north of the Limpopo was small stuff.
It has resulted in an insufferable level of hubris and arrogance in Pretoria in dealing with its neighbours.
Corrected figuresBut suddenly, in early April, Nigeria recalculated its GDP and overnight it went from 42-billion naira (about R2.8-billion) to 80.2-billion naira. The Nigerian economy had “grown” by 90% and South Africa was in a new position – number two in Africa.
Given Nigeria’s reputation for dodgy deals, many suspected that the figures had been manipulated. But Nigeria’s statistics office had got the numbers right. The old GDP estimates were based on weightings from a 1990 base. These weights should be recalculated every five years to reflect the change in the economy but this had not been done for almost quarter of a century.
In 1990, Nigeria had no telecoms, no Nollywood to speak of and no booming and aggressive financial sector. This changed in 20 years and, with a new 2010 base, Nigeria had a larger economy than South Africa. This meant that the usual measure of how rich a nation’s citizens are, its GDP per capita, went from $1?500 to $2?688 in 2013.
Of course, it does not mean much, because South Africa has about 53-million people and Nigeria 170-million. About 61% of those Nigerians are estimated to live on less than a dollar a day, and 10 years ago it was only 54%.
The GDP per capita in South Africa is $5?920. We will have to wait for a very long time before the average South African worker would voluntarily swap places with his Nigerian counterpart, no matter how big the Nigerian economy may be.
Despite former finance minister Pravin Gordhan’s brave face when confronted with his country’s relative decline in economic importance in Africa, you could almost hear the South African egos deflating.
The sound will be much more audible from Washington when China overtakes the US as the egos there are much, much bigger. But, like his South African counterpart, the average American worker is still a long way from wanting to swap places with his Chinese counterpart.
Trade numbersSome statistics are so embarrassing that it’s better to hide them. For years it has been impossible to get a reasonable estimate of South Africa’s exports and imports to and from its South African Customs Union (Sacu) neighbours – Botswana Lesotho, Swaziland and Namibia, the so-called BLNS.
Like most commercial acts, there is a good reason for why these figures are not made public. According to South African officials, all five countries are part of a single union – that is, basically one economy – and there is no need to separate the numbers.
In 2009, I conducted an agriculture study for the customs union and, despite desperate attempts, could not get access to South Africa’s agricultural exports to the BLNS.
First, I was told they did not exist; then that they were confidential; and then that the data is inconsistent from country to country, which is true.
About R20- to R30-billion in customs revenue is distributed to each of the five members every year calculated on their share of intra-Sacu imports.
The position that the figures cannot be made public in countries that claim to be accountable for their finances seemed scandalous.
But I suspect the real reason for the secrecy is that the import statistics for all five members do not tally. For example, South Africa and Namibia would appear to acknowledge that the
distribution of the customs pool is not done according to any given
formula but according to import statistics, though they differ over which should be used.
At the customs union centenary celebrations in Pretoria in 2010, the last such event to which I was invited, I publicly asked why the figures are not in the public domain in the four countries that are democratic and respect the rule of law.
My complaint, and that of others, was finally heeded by the customs union. Soon afterwards it started publishing some trade data and, at the end of last year, South Africa finally started to publish detailed information.
Who needs whom?When you look at the South African trade figures, you start to understand that there was another reason to keep the figures out of public view. They show how important Africa in general and the BLNS in particular are to South Africa maintaining economic stability and a manageable trade deficit.
There are no full-year figures available on the BLNS. For those that are, from January to August 2014, South Africa’s trade deficit was a mere R70-billion.
But if you exclude the BLNS, the trade deficit would have been R137-billion.
In other words, in this year so far South Africa has exported R67-billion more than it imported from the BLNS, which is one of the main reasons it agrees to pay such substantial amounts to them.
South Africa’s trade deficit with every other region of the world is subsidised by its surplus with Africa, and the BLNS countries specifically. That is why the South Africans fight so hard to maintain their rail monopolies and dominant position in Africa.
It is time for South Africa to conclude that it needs its neighbours, not just as markets but as partners, for its own economic development in which all must share – not just South Africans.
The advantage of such a position has long been recognised by countries such as Kenya, which has actively become integrated with its neighbours in the East African Community.
When Pretoria starts to think like the new South Africa it is the captial of, it will also recognise the ugly facts and its recalcitrance – it is now number two in Africa and it needs its neighbours as partners to stay in that position.
These are the views of the author and not necessarily those of any institution with which he may be affiliated
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