Credit risk poses biggest threat to overborder trade growth - survey

SOUTH AFRICAN exporters regard credit risks as the most serious obstacle to increased exports to other southern African countries. Corruption in those countries also rates highly as a put-off, with bureaucracy running a close third.
These facts emerge from a comprehensive study among South African exporters to identify obstacles to trade
with Southern African Development Community (SADC) countries.
The findings are published in the latest Credit Guarantee newsletter, and were compiled by Werner Soontiens, an independent economics researcher at Pretoria Technikon.
I expect the report to spur adaptions in current policies in order to establish a user-friendly and more simplified foreign trade policy, says Soontiens.
The poor economic performance of Sub-Saharan Africa is not a recent phenomenon. Among the policies which can be blamed for this performance, trade policy deserves special mention.
Most countries in the southern African region followed an inward oriented, import substitution strategy supplemented by the widespread use of tariff and non-tariff barriers to discourage external competition. A direct result of these policies is a climate and culture which discourage foreign trade.
His research and findings are based on replies to a questionnaire sent to a
large group of exporters, others supplied by Safto
and Unisa's Bureau of Marketing Research, and 1040 selected clients of Credit Guarantee.
Experience elsewhere in Africa shows that the compensation issue in particular inevitably creates tension between the different countries involved, he says. In addition, measures to counteract polarised development are unlikely to be practicable on technical and political grounds.
To avoid the polarising effects of sweeping and rapid liberalisation of trade between the unevenly developed member countries of SADC, will require a variable and evolving preferential tariff arrangement between these countries.
Soontiens' findings on the obstacles experienced in practice by exporters trading in southern Africa also
show that labour training in SADC is a hindrance to greater trade. The only
reference to South African related responses concern labour attitudes and labour costs.