Despite political pronouncements about facilitating development through economic integration of geographic regions in Africa, intra-regional trade remains limited and unbalanced. While tariff barriers have declined within Southern Africa, non-tariff trade barriers to export-import growth persist, impacting on the smaller economies. Utilising interviews with small-to-medium enterprises in land-locked Botswana, this study generated in-depth qualitative data on their experience of barriers to trading regionally. The research found that administrative procedures at the national level, ambiguity of implementation at borders and constraints on logistics constitute their most daunting impediments. Among the key imperatives then for effective regional integration and economic growth among developing countries in Africa and elsewhere are standards harmonization, regulatory streamlining, process transparency and improvement of infrastructure.
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Unscrambling Borders in Southern Africa
1. UNSCRAMBLING BORDERS
IN SOUTHERN AFRICA:
NON-TARIFF BARRIERS FACING
BUSINESSES IN SMALLER STATES
Amos Owen Thomas Edward Marandu
Stockholm University University of Botswana
2. BACKGROUND & CONTEXT..
Tariff versus Non-Tariff Barriers
– Relative efficiency and uncertainty
– Constraints of treaties for freer trade
SACU
– South African control pre-/post apartheid
– Oldest customs union but not exemplary
SADC
– Ex-bulwark against South Arica
– Amibitious aims post-apartheid
3. BACKGROUND & CONTEXT
Botswana Political Economy
– British protectorate by local tribes’ petition
– Independence in 1966 coincides with
diamonds discovery
– Among least-corrupt countries and most
competitive economies in Africa
– Landlocked country with South Africa,
Namibia, Zimbabwe surrounding
– Marginal regional trade except with
South Africa and Zimbabwe
4. Botswana Exports and Imports with SADC Region
MEMBER COUNTRY EXPORTS IMPORTS
Totals in US Dollars $547,228,078 $2,712,184,429
DRC 0.70% 0.00%
Lesotho 0.03% 0.01%
Madagascar 0.01% 0.00%
Mauritius 0.19% 0.17%
Malawi 0.12% 0.03%
Mozambique 0.16% 0.39%
Namibia 2.11% 0.75%
Seychelles 0.00% 0.00%
Swaziland 0.09% 0.00%
Tanzania 0.15% 0.01%
South Africa 48.66% 96.74%
Zambia 3.16% 0.22%
Zimbabwe 44.63% 1.68%
Totals % 100% 100%
Source: Imani Development, 2007
5. CONCEPTUALISING BARRIERS
External Impediments
– Lack of government support to overcome
export challenges
• Tariffs, quotas, subsidies, currency, content rules
Internal Impediments
– Inhibitions on firms’ export performance
• Quality standards, inadequate financing, lack
of information, export incompetence
Research Impetus
– Decline of tariff barriers worldwide
• Insignificant rise in regional trade
6. RESEARCH DESIGN
Methodological Approach
– Case-study on business in Botswana
• qualitative and analytical approach
– Key respondents from diverse industries
• Small, medium, large firms; diverse exec roles
Data Collection
– Choice of six cities or towns
• Capital, industrial city, border-towns
– Semi-structured interviews:
• Increased response rate, insights into
the unanticipated practical problems
7. IMPORT-EXPORT PATTERNS
Sourcing and Rationale
– Matter-of-fact location, cost-effectiveness
Use South Africa agents only to avoid hassles
Destination and Opportunism
– Reacting to current ad hoc demands
• Zimbabwean economy collapse
Concessions and Survival
– Existing and past tariffs and taxes
• Dependence on subsidies & incentives
8. TECHNICAL REQUIREMENTS
Health-and-Safety Standards
– Arbitrary and unexpected imposition:
• Suspicion of ulterior economic motives
Variation and Opacity of Rules
– Questionable difference in standards:
• Duplication of certifications
9. MONITORING MEASURES
Documentation Complexity
– Forms for each country entered:
• Non-linked computer systems for clearance
Non-standard Permits, Licences, etc.
– Spaghetti bowl of bilateral agreements:
• Incompatible with regional treaties
Penalties for Non-Compliance
– Fines for lack of or expired permits:
• Payable only in national currency
10. FINANCIAL DISINCENTIVES
Value-Added Tax Administration
– Payment on entry to each country:
• Delay in refund, currency exchange losses
– Tariff codes and interpretation:
• Valuation versus invoice price
On-the-Road Interventions
– Road-blocks and truck inspections:
• Fault finding, fines and bribery
– Weighbridge inconsistency:
• Hold-up till cash payment in city
11. INFRASTRUCTURE LACK
Restricted Border-Hours and Staffing
– Waiting overnight for opening:
• Joining queue despite nothing to declare
– Non-availability of staff for site-visits
• Lack transport , no documentation on weekends:
Inadequate Terminal Facilities
– Inland port delays and stipulations:
• Charges made regardless of cause
Transportation Limitations
– Road haulage, ferry runs:
• Higher cost than overseas shipping
12. CONSEQUENCES FOR TRADE
Theoretical Implications
– Protectionist effects by stealth:
• Despite SADC protocol and WTO obligations
– Retrograde steps in economic development:
• More developed economies to forgo in short-term
Practical Implications
– Bureaucratic barriers within:
• Harmonisation and streamlining regionally
– Infrastructural deficiencies still:
• Costs and constraint on trade