SOUTH AFRICA REPORT - United States Agency for International Development

SOUTH AFRICA REPORT

ASSESSMENT OF SELECTED TRADE FACILITATION MEASURES IN FIVE COUNTRIES IN SOUTHERN AFRICA

NOVEMBER 10, 2016 This publication was produced for review by the United States Agency for International Development. It was prepared by Management Systems International, A Tetra Tech Company, for the E3 Analytics and Evaluation Project.

SOUTH AFRICA REPORT

ASSESSMENT OF SELECTED TRADE FACILIATION MEASURES IN SOUTH AFRICA

Contracted under AID-OAA-M-13-00017 E3 Analytics and Evaluation Project

Prepared by: Catherine Grant Makokera Jessica Gajarsa

DISCLAIMER The author's views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government.

CONTENTS

Acronyms ...........................................................................................................................iii

Executive Summary ...........................................................................................................v

Introduction ....................................................................................................................... 1 Background............................................................................................................................................ 1 Southern Africa Development Community's Trade Facilitation Programme .............................................................................................................. 2 Purpose, Audience and Uses............................................................................................................. 2 Assessment Questions ....................................................................................................................... 2 Assessment Methodology.................................................................................................................. 3 Organization of the Country Report.............................................................................................. 3

Country Context and Analysis ......................................................................................... 4 Structure of the Economy ................................................................................................................. 4 Regional Trade Performance ............................................................................................................ 6 National Trade Facilitation Policy Objectives ............................................................................... 8 Current State of the South African Tradable Sector ................................................... 9 Status of Implementing Key Trade Facilitation Measures .......................................................... 9 How Does South Africa Rank in Trade Facilitation Measure Indices?..................... 9 Domestic Processes on Trade Facilitation ................................................................... 14

Measures Facilitating Trade Facilitation within Southern Africa.............................................................14

Current Measures by South Africa that Continue to Impede Trade and Trade Facilitation...........16

Findings ............................................................................................................................ 17 Ranking Trade Facilitation Measures in Terms of Priority ...................................................... 17 Analysis of Rankings ...........................................................................................................25 Key Obstacles and Challenges to Trade ...................................................................................... 26 Other Constraints to Trade ............................................................................................ 28

Assessment Questions 1-3: Findings by TFM ............................................................... 30 Trade Facilitation Measure Priority #1: Coordinated Border Management ....................... 30 Assessment Question 1: What is the Potential Range of Benefits Associated with the Implementation of Trade Facilitation Measure #1? .......................................................................................................... 33 Assessment Question 2: What is the Potential Range of Costs Associated with the Implementation of Trade Facilitation Measure Priority #1 Coordinated Border Management? .......................... 36 Assessment Question 3: What is the feasibility and timeframe of the implementation of Trade Facilitation Measure Priority #1 CBM? ........... 38 Trade Facilitation Measure Priority #2: Removal of Non-Tariff Barriers ............................ 40 Assessment Question 1: What is the Potential Range of Benefits Associated with the Implementation of Trade Facilitation Measure Priority #2?...........................................................................................45 Assessment Question 2: What is the Potential Range of Costs Associated with the Implementation of Trade Facilitation Measure Priority #2?...........................................................................................47

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Assessment Question 3: What is the Feasibility and Timeframe of the Implementation of Trade Facilitation Measure Priority #2?......................48

Trade Facilitation Measure Priority #3: Efficient Seaports and Linking Infrastructure ...................................................................................................................................... 50

Assessment Question 1: What is the Potential Range of Benefits Associated with the Implementation of Trade Facilitation Measure Priority #3?...........................................................................................54

Assessment Question 2: What is the potential range of costs associated with the implementation of Trade Facilitation Measure Priority #3? ........................................................................................................................... 56

Assessment Question 3 What is the Feasibility and Timeframe of the Implementation of Trade Facilitation Measure Priority #3?......................56

Findings on Other Trade Facilitation Measure Priorities Raised by Key Informant Interview Respondents .................................................................................................57

Corridor and Border Monitoring ................................................................................... 57 Rail and Road Infrastructure Upgrades ......................................................................... 59

Conclusions for Ranking the Selected Trade Facilitation Measures .......................... 61 Non-Priority Trade Facilitation Measures ................................................................................... 62

Recommendations .......................................................................................................... 63 Recommendations for Implementing South African Activities ............................................... 63 Recommendations to USAID .......................................................................................... 63 Recommendations to USAID and Other International Partners ............................ 64 Recommendations to the South Africa Government ................................................ 64 Recommendations for Implementing Regional Activities.........................................................64 Recommendations to USAID .......................................................................................... 64 Recommendations to USAID and Other International Partners ............................ 65 Recommendations to Member States of the Tripartite Free Trade Area............65 Recommendations for Future Research ...................................................................................... 65

Annex I: Assessment Statement of Work .................................................................... 66

Annex II: Detailed Assessment Methodology............................................................... 79

Annex III: Key Informant Interview Data Collection Instruments............................. 86

Annex IV: South Africa Online Survey Questionnaire ................................................ 97

Annex V: Trade Facilitation Measures Selected for the Country Specific Online Surveys............................................................................................................... 104

Annex VI: South Africa National Fiscal Context ....................................................... 107

Annex VII: Bibliography................................................................................................ 109

Annex VIII: Stakeholder Validation Workshops Report .......................................... 111

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ACRONYMS

ASYCUDA BMA CBM CBRTA CCB CDB DAFF DBSA DHA DRC DTI E3 FESARTA GCI GDP JICA KAP KII KZN LPI M&E MCLI MSI MTEF MTSF NEDLAC NSW NDP NTB OECD OSBP RKC SAAFF

Automated System for Customs Data Border Management Agency (South Africa) Coordinated Border Management Cross Border Road Transport Agency Customs Control Bill Customs Duty Bill Department of Agriculture, Forestry and Fisheries (South Africa) Development Bank of South Africa Department of Home Affairs Democratic Republic of the Congo Department of Trade and Industry (South Africa) Bureau for Economic Growth, Education and Environment (USAID) Federation of East and Southern African Road Transport Associations Global Competitiveness Index (WEF) Gross Domestic Product Japanese International Cooperation Agency Key Action Plan Key Informant Interview KwaZulu-Natal Logistics Performance Index (World Bank) Monitoring and Evaluation Maputo Corridor Logistics Initiative Management Systems International Medium Term Expenditure Framework (South Africa) Medium Term Strategic Framework (South Africa) National Economic Development and Labor Council National Single Window National Development Plan (South Africa) Non-Tariff Barrier (to trade) Organisation for Economic Co-operation and Development One-Stop Border Post Revised Kyoto Convention South African Association of Freight Forwarders

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