Lack of information hampers import growth from Africa

There is huge opportunity for import growth into South Africa from Africa but the “black hole” that is a lack of credible information as well as the lack of legislative cohesion – particularly from countries beyond the Southern African Development Community (SADC) region – places a limit on the potential for growth. So say the shippers, freight forwarders and shipping agents FTW spoke to. During the 2011/2012 trade period, the value of total trade between South Africa and Africa increased by 15% from approximately US$ 23 billion in 2011 to US$26 billion in 2012. Total imports from Africa increased by 31%, according to the South African Institute of International Affairs. “We have a global mandate to increase our trade – both imports and exports – with Africa but because there is so little credible, trusted information on legislation, regulations, infrastructure, risk profiles etc we are hesitant to take the risk on unknown countries,” says one shipper, adding that he has also tried, and failed, to find regular sources of information on prospects for import growth from Africa. A global logistics major told FTW that companies wanting to import goods from Africa needed to do their homework on the correct documentation customs and other government agencies require, such as licensing and certification. “Otherwise goods coming in could be returned to the country of origin or even confiscated,” he commented. One shipper related that his goods were once delayed for clearance by 21 days in Tanzania because the registration requirements were not met. “One of the most frustrating things is that there are major differences for each country or region in terms of regulations, requirements and documentation.” She said that a presence in a particular country or reliable on-the-ground partners made a difference, but added that sometimes finding those reliable partners could be challenging in itself. She also noted that companies also needed to do research on duties for imported goods. “Again, this differs from country to country but understanding whether customs duties are payable in the country of import goes a long way towards ensuring goods get to the market quicker,” she said. A shipping agent told FTW that the lack of knowledge also led to corruption. “As soon as there is someone on the ground who is armed with that knowledge, they attach a price to sharing it,” he stated. Other challenges hampering import growth are a lack of infrastructure and border inefficiencies which can drive the price of imported goods up “quite considerably”. This as transport costs skyrocket as a result of border delays, resulting storage costs and more says a freight forwarder.