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Hurdles to trade? South Africa’s immigration policy and informal sector cross-border traders in the SADC

6. Visa status and issues of legality and illegality

6.1 Immigration status

The research suggests that the overwhelming majority of these traders hold visitors visas that suggests they wish to travel and trade legally. No country in the region has a specific category of permit for traders. Most have to provide paperwork (extensive when getting a visa for South Africa in Zimbabwe), and Mozambicans have to pay relatively costly visa fees to enter South Africa. Interviewees found the increasing restrictions and demands for documents costly (in time and money), difficult to get, and a hindrance to their businesses. For instance, traders from Bulawayo need to travel to Harare and provide a series of documents (including a bank account and a letter of invitation from someone with a valid SA identification number) to get a visitors permit before they can travel to South Africa. The use of single entry visas adds to their problems. Notwithstanding these difficulties interviewees showed a strong commitment to wanting to enter legally with appropriate visas.

Because these traders rarely qualify for business permits they are issued visitors permits (with the knowledge of immigration officers). Technically these do not allow cross-border traders to participate in street trade in South Africa, which leaves them vulnerable to arrest by police and Home Affairs officials. More often it seems it leaves them vulnerable to corrupt officials who elicit bribes rather than arrest them.

The ambiguous use of single entry visitors visas therefore:

  • increases opportunities for corruption among officials when the issuing of visitors visas tacitly acknowledges that it will be used by traders;

  • makes it difficult for the Department of Home Affairs to monitor and regulate patterns of migration as there is no way of distinguishing between traders, visitors, and people using visitors visas to find employment;

  • the use of single entry visas increases administrative pressures and costs to government (except in the case of Mozambicans who pay for their visas);

  • creates uncertainty for traders as they are unsure if, when and for how long they will be allowed into South Africa; and

  • adds running costs to the businesses of these entrepreneurs.
6.2 Issues of illegality

Issues of illegality and corruption obviously arise when discussing informal sector cross-border trade. Illegal goods, drugs, guns and stolen goods form part of the volume of goods that cross the border. However, research suggests that there is a separation between criminals involved in the trafficking of illegal goods and cross-border traders who carry legal goods.

However, many traders are involved in the evasion of at least part of the customs duties owing on goods and therefore are involved in the smuggling of goods (even if they are legal, and legally bought). In part this appears to be a reflection of high customs duties imposed by states in the region on certain goods (notwithstanding the reduction in tariffs following the introduction of the SADC Free Trade Protocol).

It also seems that these small entrepreneurs find it difficult to (or cannot) access reduced tariff or non-tariff quotas (for instance those between South Africa and Mozambique). Access to these tariffs is difficult because traders do not know about them, cannot do the paperwork, do not have the time to apply for them, or do not qualify for them. Furthermore evidence from interviewees suggests that even when reduced tariffs have been introduced, corrupt customs officials continue to charge at old rates as traders are not informed of reductions in tariff rates.

This latter practice may be made easier by what seems to be the predominant form of evasion of duties. Most traders appear to try to take their goods through the border post with them. They then pay bribes to customs officials to let the rest of the load through without paying duties. As one trader said: “For instance, if you have 50 boxes of Cerelac (babies milk formula) you can pay for 20 at customs (which gives a receipt) and give some money to the officer who checks your luggage” (Peberdy, 2000b: 373). Passengers on buses may also take a collection to pay an officer to let the bus through without being checked. Others pay people to cross the border to carry the goods across the border illegally (often at night). There is some disturbing anecdotal evidence which suggests that children are sometimes used to carry goods over the border illegally which raises questions about their involvement in illegal activity as well as in child labour. There is also abuse of informal border crossing points.

Despite the avoidance of duties traders interviewed indicated that they were willing to pay duties, but that the rates currently demanded were too high to enable them to make sufficient profits. While those who carry large amounts of goods are no doubt able to stand the cost questions do arise about the economic viability of charging duties on small amounts of goods (for instance, below R5,000). The administrative costs and creation of opportunities for corruption may outweigh the revenues received as well as the cost to these small entrepreneurs. Certainly facilitating legal movement across-borders in SADC is likely to encourage traders to pass through formal border crossing points and to have the proper documents so customs control can be exercised.

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