Africa

World Trade Organisation - Geneva 2012

Africa in Perspective – Key Road Block Scenario

Key Challenges

Conclusion - Risk and Reward

Over 1,100 operational locations worldwide

968 Operational sites in Southern Africa

61 Operational sites in Europe

The world does not underestimate the opportunity, potential & businesses opportunity in Africa!

Africa needs become competitive :

• Transparent Trade Facilitation Imports / Exports;• Improved Trade Procedures • Cross border & corridor development• Combined commitment by Africa governments

• Reducing the cost of logistics• Conversion of import cargo to the African destination ports• Create balanced two directional volume flows

• Investment in infrastructure• Ports• Rail• Roads• ICD• IDP

Red Tape moving goods Regionally, Intra-Africa, Cross Border & Imports / Exports

Vastly Duplicative

No alignment & co-operation between relevant government & trading agencies

Average Custom Transactions:

Some 25 different parties and 40 documents

A vast amount of data elements:

Some 20% repeated numerously

Re-Keying of data in excess of 80% - Post to Post

Cost of Logistics – Perspective:

Globally to “GDP” - 7.5%

South Africa to “GDP” - 13.0%

Africa to “GDP” - +30%

Border Posts – Africa

Inefficient

Lack of and no regional alignment – information technology as an enabler

Border Agency Facilitation

Totally duplicative – re-keying of all information

Lack of resource i.e. current methodology

Road block and “ The key cost driver” to trade facilitation

Imports % Contribution

China 28.7

India 12.9

USA 11.3

France 11.2

Brazil 7.4

UK 7.4

Japan 2.9

Product Category Export World Import World

Basic Foods 14,875,274 21,052,701

Beverages & Tobacco 1,934,175 1,653,717

Ores, Metals & Precious Stones 19,304,114 3,931,312

Fuels 81,278,815 17,188,542

Manufactured Goods 19,442,801 34,861,887

Chemical Products 6,829,963 16,684,141

Machinery & Transport Equipment 9,685,665 53,868,421

Total 153,350,808 149,240,722

Exports % Contribution

EU 41.9

ROW 17.87

USA 17.6

Asia 6.6

Intra Rec 5.8

China 5.5

ROA 2.81

Top ports handle more than a 90% of total volume in SADC region and East coast shares 71% and West coast shares 29% of total volume.

SADC Region Key Gateway Ports Volume in 2008-09 (all in tonnes)

East Coast Ports Country Export Import Transit

Duban SA 26 759 299 47 725 485 8 916 032

Port Elizabeth SA 6 227 482 4 423 266 678 665

Maputo MZ 1 749 329 575 802 1 749 329

Dar Es Salam TAN 1 480 152 6 148 690 377 479

West Coast Ports Country  Export Import Transit

Saldanha SA 34 561 876 13 212 275 1 707 376

Cape town SA 6 372 035 6 769 983 1 804 896

Walvis Bay NAM 3 769 756 1 568 754 871 184

Luanda AG 2 240 000 4 360 000 1 980 000

Data Source: Various SADC Port Sites

Heading % “COS” Cost PD Days PA

W/Ave Tariffs Imports on TCD 15 $46 312

X Border Tariffs 4 $30 312

Fixed Cost ito Logistics 50 $365.00 312

“Logistics” as part of the value chain, the key driver of cost in Africa (+30% of “GDP”) - negatively impacting on economies in the region and certainly socio conditions

Assumptions:

Simulation - Container Shipment , Main Chinese Port to Lusaka

Weighted Average Import Tariffs / Duties – Machinery, Manufactured Goods, Food & Chemicals

28 shipments per annum

40’ TEU’ – 30 ton per container

Three destination Ports on weighted average - destination

Simplified trade procedures

Expediting the passage and release of product Customs & border post, reformation & modernisation Information Technology & Systems – aligned, as a business enabler in, too & out of Africa

Reduce Cost of Logistics

Balancing imports to export volumes - two way traffic - Conversion

Political & Regulatory Challenges - Integrity & Strength of Institutions

Socio Economic Challenges – Growth vs. Infrastructure

Social Media & Connectivity - Enabler

Banking & Finance Challenges – Growth, Sustainability & Continuity

Human Resource Challenges - Foundation

Infrastructure Challenges – Road, Rail, Air and the Great Lakes

The state of all the above result in a much higher cost of doing business in Africa compared to that of the developed world.

“SME,s” and the informal sector in Africa equate to some 65% of “GDP” creation and (as well now, the formal sector) find it cannot participate in Intra Africa, Regional Trade and Internationally, from a volume perspective and or the lack of formal, supportive and well managed trade and government agencies, as enablers and the catalysts to growth .

Vehicle to enhanced Socio-economic development

Regional Employment Creation

Economic Growth prosperity, success, sustainability and continuity is dependent on

development

Transformation and empowerment to the future

Skills Development

Dedicated development interventions and initiatives local employed population

Transformation objectives promoted by various skills development initiatives

Africa “The Future”: Facilitating Trade through integrity , Simplified Trade Procedure & Framework and Integrated Infrastructure & Information Technology