by Ciaran Fagan

Moving up in the world of trade

According to a report conducted by the World Bank, trade in SA has improved markedly

The World Bank
Worldbank_logo-300x300.jpg

According to Charles Brewer, managing director of DHL Express Sub-Saharan Africa, this acknowledgement will generate great and positive spillover effects to the rest of sub-Saharan Africa.

He explains that developing economies have the most to gain from improving trade efficiency. “By removing logistical and bureaucratic barriers facing trade, South Africa has improved its global competitive advantage and is likely to reap the economic rewards of the efforts. By successfully implementing its customs modernisation programme, South Africa has been able to significantly cut the time, cost and documents commonly associated with local trade."

Brewer highlights the positive relationship that exists between trade efficiency and economic prosperity. “Research from the report revealed that a reduction of four days in the time to either import or export was positively associated with a 0.1% rise in gross domestic product per capita.”

Additionally, Brewer says that the implementation of these measures will dramatically improve South Africa’s ability to attract foreign direct investment.

He indicates, however, that the benefits are not limited to South Africa. “The improvement in South Africa’s trade standards will create a strong ripple effect throughout sub-Saharan Africa. Landlocked countries such as Lesotho, Swaziland, Zimbabwe and Botswana are more likely to benefit from this improvement, as foreign goods pass through South Africa into their respective territories.”

Brewer says that although South Africa’s strong improvement in border efficiency customs reforms will prove to be particularly fruitful, it is essential that inland infrastructure also remains a strong focus in facilitating trade efficiency. “For example, latest research conducted in sub-Saharan Africa revealed that reducing inland travel by simply one day resulted in a 7% increase in exports.”

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