South Africa’s approach to the future of trade negotiations can be expected to be informed by leading documents such as the National Development Plan (NDP) and recent Industrial Policy Action Plans (IPAPs). However, the apparently disjunctive nature of the NDP in particular casts a long shadow of unclearness over what direction trade development should be moving and raises concern over the feasibility of directly mentioned strategies.

This working paper seeks to act as a discussion document on the dichotomous policy discourse in South Africa and the possible implications for trade strategies. Though the issues raised in this paper are applicable to South Africa’s trade strategy in general, particular focus will be placed on trade with Africa.

Developing countries are struggling to maintain competitiveness in their exports while simultaneously struggling to compete against imports. Africa is certainly no exception in this regard, and the failure of Africa to become industrially competitive implies that African countries continue to lag behind both their developing counterparts and the developed world. This failure has encouraged ideals of becoming competitive by moving up the value chain. Trade in services is thus becoming increasingly important on the African trade agenda but, the nature, limitations and implications of such trade are not clearly addressed.

Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.

Under the Southern African Development Community’s (SADC) Finance and Investment Protocol, Annex 6 provides for cooperation on payment, clearing and settlement systems. The subcommittee responsible for this Annex has successfully implemented a cross-border payments system, and is reportedly working towards addressing regulatory issues and the cost profile with regard to worker remittances.

Despite this (and other) ongoing work, the World Bank still reports that seven of the top twenty most expensive remittance corridors are between countries in the SADC region, and a further two between countries in the region and elsewhere in sub‑Saharan Africa.

Many factors affect cost of remittances – weak infrastructures, a lack of transparency and competition, and financial regulation constraints. This briefing will explore two alternative (to traditional bank transfers and money transfer operators (‘MTOs’) such as Moneygram and Western Union) channels of remittances that rely on existing networks for funds transmittal – mobile money, which uses the mobile phone network, and retailer remittances, which use the networks of retail stores.

These channels not only offer potential competition in the space occupied by banks and traditional MTOs, but potential to reach further – in both a geographical and socio-economic sense – than traditional providers. This trade brief therefore also considers what else SADC could do to play a leadership role in encouraging an environment to better facilitate the cross‑border movement of money through these channels in the region to enhance competition and thereby potentially reduce prices.

Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.

The South African Rand experienced an almost continual state of depreciation over the period 2011-2015, culminating in a massive risk premium shock to the currency, and an acceleration in the rate of depreciation, in December 2015. Economic theory shows that the ultimate economic impact of a currency devaluation will depend on a range of factors, the most important of which are the export and import price elasticities in the devaluing country. These elasticities in turn depend heavily on the country’s market power, i.e. whether it has a ‘small’ or ‘large’ economy.

South Africa is a ‘small’ country in respect of its global market power, and most studies have confirmed that it fulfils the Marshall-Lerner condition for a devaluation to be BOT improving. This paper does not contradict this finding, but in a simulation of the disaggregated impacts of a ‘devaluation’, finds that the overall economic effect of the fall in the value of the currency is contractionary.

Not every sector contracts, however, and some sectors benefit from improved export and import-substituting competitiveness. Interestingly, the winners and losers of the ‘devaluation’ are highly consistent with the current industrial policy emphasis of the South African Department of Trade and Industry (the IPAP). However the Rand’s loss in value does not support the financial, technological, and human capital development of the economy, since the tertiary sector unambiguously loses out as a result of the ‘devaluation’.

Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.

The objective of this paper is to provide information on Nigeria and its merchandise trading profile and regime. Nigeria is a middle-income country with a Gross Domestic Product (GDP) of around $265 billion, a figure the same as Egypt’s but below South Africa’s $385 billion.

However, in early 2014 Nigeria rebased its GDP calculations for new estimates that put Nigeria’s GDP in 2013 at $510 billion, an 89% increase on the estimates at that time. The revision means Nigeria leapfrogs South Africa to be Africa’s largest economy. It rises to 24th in the list of the world’s big economies, behind Poland and Norway and ahead of Belgium and Taiwan.

Oil-rich Nigeria has been hobbled by political instability, corruption, inadequate infrastructure, and poor macroeconomic management, but in 2008 it began pursuing economic reforms. Nigeria’s former military rulers failed to diversify the economy away from its over-dependence on the capital-intensive oil sector, which provides 95% of foreign exchange earnings and about 80% of budgetary revenues.

However, since 2008 the government has begun to show the political will to implement the market-oriented reforms urged by the International Monetary Fund (IMF), such as modernising the banking system, removing subsidies, and resolving regional disputes over the distribution of earnings from the oil industry. GDP rose strongly in 2007-12 because of growth in non-oil sectors and robust global crude oil prices. Nigeria ranks tenth in the world for oil production and eighth as an oil exporter, leading Africa in both production and exports.

The 2012 World Trade Organisation (WTO) trade data shows that during 2012 exports were valued at $115,000 million while imports were a much lower $51 000 million. Exports increased by 12% during the 2005-2012 period while imports increased by a slightly higher 14%. In 2012 the annual changes were reversed and exports had a 1% increase while imports decreased by 9%. Oil products completely dominate exports while manufacturing products equally dominate the imports.

Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.

Mozambique is one of the Southern African Development Community (SADC) members experiencing a steady economic growth in the region. Macroeconomic policy is deemed sound and the Gross Domestic Product (GDP) has been inching upwards. The country has been regularly ameliorating its investment law to fit the current good business environment requirements to attract more investors, especially foreigners. As a World Trade Organisation (WTO) member, a more open trade and business environment has been apportioned to Mozambique by the Trade Policy Review Committee.

While the business environment has improved, the question is whether the country’s economic performance should be attributed to foreign investment flow. Although a lot of investment facilitation has been done in terms of official documents, on the ground the reality might be different, as is the usual policy challenge in many developing countries. Hitherto, the country’s economy is more reliant on prevailing Official Development Aid (ODA) channeled by traditional donors into diverse development projects.

This paper seeks to delve into the investment regime of Mozambique. The main aim is to shed light on its contribution to economic performance in the country. In addition, the paper seeks to trace investment law implementation challenges, on the one hand, for the country, and on the other, for investors.

Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.

The Southern African Customs Union (SACU) is a customs union, as defined by having regional free trade behind a common external tariff (CET). This creates a common customs area covering the markets of Botswana, Lesotho, Namibia, South Africa and Swaziland (BLNS).

Contrary to the conventional model of a customs union, SACU is also an excise union. Furthermore, with the exception of Botswana, the member states are also organised in the Common Monetary Area (CMA) which effectively integrates Lesotho, Namibia and Swaziland into the South African money and capital market. In the model of linear regional integration, SACU would represent a good example of variable geometry.

This paper addresses the use of industrial policy as a means of encouraging the economic development of SACU member states, the smaller and economically lesser developed countries in particular. The topic is not only relevant because SACU is a customs union of developing but unequal economies but also because the SACU Agreement of 2002 specifically requires the Member States to develop common industrial policies. This makes a close consideration of the rationale and nature of SACU industrial policy a policy and legal imperative.

The way in which SACU currently operates and the challenges the customs union face in terms of designing and implementing an appropriate industrial policy are intimately linked to the unique nature of SACU and of its development since its establishment early in the twentieth century.

To explain this uniqueness the paper commences with a brief overview of the salient developments in the history of SACU with an emphasis on facets of industrial policy followed, in consecutive sections, by a discussion of industrial policy and development strategy in the common customs area.

Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.