Protectionism stunts regional trade growth

HIGH IMPORT tariffs, trade barriers and a culture of protectionism impedes economic growth, according to Tshediso Matona, director general of the SA department of trade and industry. According to BuaNews, Matona told a recent SA-Nigeria Business Forum that these acted as obstacles for trade and investment. “While we encourage the development of industries through certain targeted subsidies and support from government, generalised high levels of protection we have found is a barrier to growth”, said Matona. Pointing to the political goodwill between Nigeria and SA, Matona added that both countries needed to exploit the abundant trade and investment opportunities. “Trade and investment between SA and Nigeria has been growing at a phenomenal rate but we’re only starting to scratch the surface. “Unbalanced trade between African states is a known trend that needs to change, as inter-Africa trade is a mere 10% of continental trade. The average inter- Africa trade between 1996 and 2005 was 9.6% of total trade.” The trade relationship between SA and Nigeria has seen substantial growth from 1999 to 2007, increasing to almost R11-billion last year. This is attributable to a rise in demand for energy resources in SA. According to the department, crude oil constitutes 98% of SA imports from Nigeria. In 1999, only four SA businesses operated in Nigeria, but today, there are over 100 companies doing business in the country in almost all sectors of the Nigerian economy.