SADC threat of protectionism

Import protection measures are
threatening SA’s export dominance in
the region – and it’s an issue that needs
to be addressed sooner rather than later
according to market analysts.
“South Africa imported goods valued
at about R35 billion from Africa last
year while it exported about double
that (R70 billion) to the continent,” said
Gauteng Growth and Development
Agency (GGDA) economist, Aloyo
Naum, speaking at the launch of the
agency’s report on Trade and Foreign
Direct Investment Inflows from South
Africa to Africa in Johannesburg last
week.
“That figure is expected to rise
steadily over the next few years,
especially as South Africa has the most
developed manufacturing sector in sub-
Saharan Africa, but there are growing
threats to our export dominance in
the region, with countries increasingly
putting trade barriers in place instead of
focusing on a freer, more open regional
market place,” he added.
Most of SA’s intra-Africa trade is with
the Southern African Development
Community (SADC) and West Africa.
Only R5 billion of the country’s total
trade with Africa is with North and
East Africa. According to Naum, the
latter markets need to be targeted for
improved bilateral trade to overcome
the current volatility in the West African
markets and the increasing import
protection measures implemented in the
SADC countries.
Director of Tutwa Consulting,
Peter Draper, agreed pointing out
there had been a lot of criticism
from neighbouring trade partners
about South Africa’s regional export
dominance, with ever louder calls for
import duties to be levied against the
country.
“The calls for extra tariffs and duties
are obviously to protect local industry
but the detractors don’t always look at
what is being exported and how the SA
imports impact on the broader industry
of a country,” said Draper.
He pointed out that South Africa
exported a lot of machinery and other
equipment to its neighbours, which
was often used to aid local production.
“It could therefore be argued that SA
contributes to inclusive regional growth
by providing the tools necessary for
improved regional industrialisation,”
commented Draper.
He added that SA also exported
a lot of consumer goods that were
unavailable in the neighbouring
countries. “I understand the need for
protection of local industries but I think
that protection is often implemented
incorrectly,” said Draper.