Cold Link Africa January / February 2020 | Page 35

FEATURE
INCORPORATING COLD CHAIN
poor trade logistics and high security
risks. NTBs are another obstacle to
intra-Africa trade. Infrastructural,
policy and procedural constraints
create trade bottlenecks – complex
clearance procedures, cumbersome
documentation requirements
and unpredictable trade policies
contribute to high intra-Africa trade
costs. Reductions in NTBs can increase
economic growth and raise the volume
of intra-Africa imports and exports
and improve terms of trade across the
continent. The EAC, SADC, COMESA,
ECOWAS and UEMOA have initiated
measures to address the NTB problem
and the effect on intra-REC trade. Most
notably are the COMESA-EAC-SADC
and Borderless Alliance (for ECOWAS
and UEMOA) NTBs Reporting, Monitoring
and Eliminating mechanisms. A similar
mechanism is envisaged in the AfCFTA.
However, the AfCFTA NTB mechanism
can only be utilised once NTB complaint
procedures at REC level have been
exhausted (and failed to provide a
solution) or if an NTB complaint arises
from trade between different RECs.
SOUTH AFRICA TRADING WITHIN
A report published by the Trade Law
Centre (tralac) states that in 2018,
South Africa exported and imported
goods to and from the rest of Africa
to the value of USD25-billion (R367-
billion) and USD11.5 billion (R16.9-
billion), respectively. Intra-Africa exports
account for 26% of South Africa’s total
exports and imports for 12% of total
imports for 2018. Between 2017 and
2018, South Africa’s intra-Africa exports
increased by 7%, while intra-Africa
imports increased by 35%. Increased
imports are mainly due to a 73% and
28% growth in imports of petroleum
oil and petroleum gas. South Africa’s
main intra-Africa export products are
petroleum oils, goods and passenger
motor vehicles, coal and chromium ores
and concentrates. The Top 10 intra-
Africa export products accounts for 26%
of South Africa’s total exports to other
African countries.
Fifty percent of South Africa’s intra-
Africa imports are crude petroleum
oils. 87% of which are imported from
Nigeria and Angola. Other main import
products are petroleum gas, mixtures
of odoriferous substances (a beverage
additive), semi-manufactured gold and
electric energy. The top 10 products
South Africa imports from the rest of
Africa accounts for 69% of South Africa’s
total intra-Africa imports. South Africa
mainly trades with neighbouring countries
(except for Zambia as a destination
market and Nigeria and Angola as
source countries).
In terms of South Africa’s total trade
(exports and imports) with the rest of the
continent;
• Namibia (13%),
• Botswana (12%)
• Nigeria (12%) and
• Mozambique (12%)
COLD LINK AFRICA •
January/February 2020
COUNTRIES THAT HAVE RATIFIED AFTCA:
1. Ghana
2. Kenya
3. Rwanda
4. Niger
5. Chad
6. Congo Republic
7. Djibouti
8. Guinea
9. eSwatini (formerly Swaziland)
10. Mali
11. Mauritania
12. Namibia
13. South Africa
14. Uganda
15. Ivory Coast
16. Senegal
17. Togo
18. Egypt
19. Ethiopia
20. The Gambia
21. Sierra Leone
22. Saharawi Republic
23. Zimbabwe
24. Burkina Faso
25. São Tomé and Príncipe
26. Gabon
27. Equatorial Guinea
28. Mauritius
Credit/Source: tralac
These are South Africa’s main African
trading partners.
The main destination markets for South
African exports are Botswana, Namibia,
Mozambique and Zambia. South Africa
mainly sources intra-Africa imports from
Nigeria, Angola, eSwatini and Namibia.
At a Parliamentary session discussing
the Free Trade Agreement Deputy
President David Mabuza encouraged
looking at technology to further improve
trading, saying, “We can for example
make major advances in upscaling of our
value-added exports taking advantage
of rapid technological advances to
achieve new efficiencies along product
value chains.”
COSTS OF TRADE
Most of the goods imported into South
Africa from other Southern African
Development Community (SADC)
member states enter duty-free. The only
exceptions are wheat flour, sugar, second-
hand clothes and tyres.
South Africa’s highest ad valorem
import duties are levied on imports of
whole frozen chicken, prepared or
preserved pineapples, and uncooked
pasta not containing eggs, to name
a few.
Thirteen percent of South Africa’s
intra-Africa exports are to countries that
are not members of Southern African
Customs Union (SACU) or SADC. South
Africa sources 42% of its intra-Africa
imports from countries outside SACU and
SADC. About 93% of these imports are
crude petroleum oils from Nigeria and
Ghana. Other imports include frozen
sardines, technically specified natural
rubber, liquefied propane, ammonia
and cocoa paste. Apart from Nigeria
and Ghana, other source countries are
Egypt, Togo and Morocco. Of the top
20 products (97% of products imported
from outside SACU and SADC) South
Africa imports, only four tariff lines have
non-zero tariffs. These are non-woven
synthetics, oilcake, ignition wiring and
fresh grapes.
Estimated gains from the African Continental Free Trade Area
$16.1
billion
1-3%
in welfare
gains
33%
intra-Africa
exports
in
GDP
1.2%
total
employment
50%
African market
1.26 billion people
$2.1 trillion
GDP
in trade
deficit
The estimated gains expected from AfCTA.
Experts say that the Agreement is not only
creating the biggest trade agreement
since the World Trade Organisation
was established in 1994 but is also the
most significant step towards economic
integration which has already been
achieved in other regions in Africa.
According to the UN Conference on Trade
and Development, regional intra-trade
accounts for 59% of Asia’s exports and 69%
in Europe.
Although perishables haven’t seen
a good import and export relationship
continentally, AfCTA is expected to
change the way trade is done. Great
strides can be expected to occur as
soon as challenges relating to cross-
border travelling, corruption, political
instability and so on are solved. We will
be looking very closely as to how things
pan out regarding the Agreement but
we remain optimistic.
MAKING IT WORK
The effective implementation of
the AfCFTA commitments (on trade
facilitation, customs cooperation, transit,
sanitary and phytosanitary measures
and technical barriers to trade) and
infrastructure development will determine
how successful the AfCFTA NTB complaint
mechanism will be. Without effective
remedial action and better infrastructure,
recurring and non-actionable NTBs will not
be eliminated.
The AfCFTA’s NTB complaint
mechanism has the potential to highlight
those NTB related aspects of intra-
African trade policy and practice which
pose obstacles to increasing intra-Africa
trade. Trade policy changes, improved
cross-border procedures and new
remedial measures should follow. The
AfCFTA State Parties should tackle these
problems as a matter of urgency. The
proposed arrangement is only a starting
point. CLA
Sources:
UNECA
Wikipedia
AU Commission
tralac
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