Trade: Making the SADC Market Viable one road, port, and custom house at a time

Image courtesy of Trademark SA

Yesterday I attended a meeting at the Corporate Council on Africa concerning the proposed North South Trade Corridor running from Durban to Dar Es Salaam, and from Tanzania to the Eastern Congo through Rwanda and Uganda. This North-South Corridor will link up a number of existing trade corridors in an attempt to join the EAC, COMESA, and SADC economic communities.

In the medium to long term, this is especially great news for South African producers. Upgrades to regional trade infrastructure should make SADC markets more attractive and accessible as the strong Rand makes overseas market entry extremely costly.

The trend toward regional integration and intra-African trade should inform any South African exporter’s 5 year plan. Read this Africa Business Report for a wider view of regional integration’s march forward in Africa.

Recently released World Bank figures predict robust growth in 2011 for many SADC countries, specifically Mozambique (7.5% predicted GDP growth), Angola (~7%) and Zimbabwe (~11%). Improved trade infrastructure and customs procedures in SADC are creating a 230 million person market one road, port, and customs house at a time (The SADC population will reach 500 million by 2050).

This vision is not yet reality. A look at this Regional Trade Facilitation Program’s report reveals how painful intra-regional trade can be. The report describes a Brenthurst Foundation travel diagnostic conducted for the Rwandan government; it notes that, “the truck used to move a container of coltan over five days from Kigali to Mombasa did not move for 60% of the time”. Wow.

My point is the following: trade corridors and other manifestations of regional integration have already opened up trade opportunities, but they will open up many more. Companies should stay abreast of regional infrastructure developments as they design mid to long term business strategies.

For example: Yesterday several participants in the discussion lamented the failure of the Beira and Walvis Bay port upgrades to draw off significant traffic from Durban. Now policy makers are discussing how to further incentivize shippers to utilize ports other than Durban…what incentives would change your businesses’ calculus? Similarly, would dramatic changes in the efficiency of customs along the SA-Mozambique, or SA-Namibia border affect your business plan? Because they may be right around the corner.

Keep abreast of trade developments with Trademark SA.

Conor Godfrey, saibl office, Washington DC