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Hurdles to trade? South Africa’s immigration policy and informal sector cross-border traders in the SADC
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2. Relationship to trade and economic policies
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Africa is an important export market for South Africa and this market is dominated by southern African countries. The significance of this trade lies not only in its quantity but also in the kinds of goods traded as well as South Africa’s commitment to the development of the rest of the region and the continent. In 2001, African markets constituted 13.7% of SACU’s total export trade, while non-SACU, SADC countries accounted for 8% of the same trade—or 59.2% of exports to non-SACU African countries (South African Revenue Service (SARS), 2001)4. SACU’s export trade with the rest of Africa (including SADC countries) increased more than 3.5 times , while trade with non-SACU SADC countries almost tripled (Peberdy, 2000). The volume of imports has also increased but not at the same rate.5
South Africa enjoys an enormous trading advantage over its African trading partners (Table 1). This trade imbalance grew significantly in the 1990s increasing from 3.9:1 in 1994 to 5.7:1 in 1998 to 8.5:1 in 2001 (Peberdy, 2000; SARS, 2001).
SACU’s export markets in Africa are dominated by machinery, electronics, chemical products, cars, metals and minerals. All, with the exception of minerals, are important areas for South Africa’s manufacturing industry (Davies, 1997). Foodstuffs and vegetables also figure prominently in SACU trade with the rest of the continent.
Like trade, South Africa’s direct foreign investment in the rest of Africa has grown significantly in the 1990s. Much of this investment is in the retail sector. Checkers and Clicks stores can be found in Zambia, Zimbabwe and Mozambique. South African clothing retailers and fast food outlets are visible across the region.
As noted above South Africa’s commitment to the SADC Free Trade Protocol reflects the country’s commitment to regional trade, integration and development. Should these corporate businesses be the only ones to benefit from regional retail and wholesale markets and the opportunities provided by the new regional trading regime? Should we be looking to see how opportunities can be created (or facilitated) for SMMEs and new entrants into the regional trading market?
2.1 Relevant policy initiatives
Informal sector cross-border trade intersects with a number of South African and SADC policy initiatives that emphasise the importance of developing regional trade, regional export markets and SMMEs. Relevant policy initiatives include:
NePAD—emphasises political and economic development in Africa together with integration and an African focus on development.
0SADC Free Trade Protocol—the Protocol emphasises tariff reduction as a means to encourage regional economic growth, integration and development and to promote regional trade and integration with the aim of creating a free trade zone by 2008.
The Growth, Employment and Redistribution Strategy (RSA, 1996)—which stresses the need for growth in the export sector to realise goals for GDP growth and job creation and which encourages expansion in private sector capital formation.
Cross-border and Spatial Development Initiatives (de Beer et al., 1998; Harrison & Todes, 1996; Mitchell, 1998; Rogerson, 1998a, 2000)—stress their importance for achieving higher rates of economic growth and job creation and promoting areas of export manufacturing. Increasing emphasis is being laid on using these policies to develop and support the growth of a southern African regional economy and localised border economies.
Manufacturing and export promotion policies—these emphasise developing certain sectors of South Africa’s manufacturing industry including: textiles, electronics, machinery and food products. All of these are important goods in informal sector cross-border trade.
Local economic development policies—in certain key cities (Johannesburg, Durban and Nelspruit), local economic and tourism development plans are recognising the opportunities offered by cross-border trade and are putting policies in place to attract cross-border traders from the region and the rest of Africa.
Strategy for the Development and Promotion of Small Business in South Africa—published in 1995, the strategy commits the government to uplifting the role of SMMEs. Fundamental to the process are: fostering an enabling environment, stimulating sector-focused economic growth, facilitating income earning opportunities and promoting black-owned business.
This paper argues that the potential positive impact of these policies (particularly the SADC Free Trade Protocol) on regional trade and particularly SMMEs involved in cross-border trade are not being realised by these entrepreneurs, in part because of obstacles placed in their way by the South Africa’s immigration policies. The advantages of these policy initiatives should not be confined to large formal sector companies. The business of small entrepreneurs involved in cross-border trade should also be facilitated as a means to encouraging the development of the SMME sector in South Africa and the region, as well as regional trade and integration, poverty alleviation and the economic empowerment of women.
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| Footnotes:
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- Trade figures are provided for SACU countries, not South Africa alone.
- South Africa’s links with countries outside the SADC may appear tenuous. However, although sanctions restricted trade between South Africa and the rest of the continent during the apartheid years, trade still took place. By 1988, 10% of South Africa’s trade went to the rest of Africa (Bouillon, 1996: 4-5). Countries that are the source of “new” migrants and refugees—particularly the DRC, Kenya, Ghana, Nigeria, Mali, Cameroon and Senegal—have strong or rapidly growing trade links with South Africa. In 1998, South Africa’s largest trading partners outside the SADC were Nigeria, Kenya, Ghana, Cote d’Ivoire and Uganda (Peberdy, 2000).
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