Until South Africa finds a way to ease market access barriers, the country will not achieve the most optimal levels of trade.

These are the sentiments of Khaya Sithole, a prominent accountant and economics commentator, speaking during a webinar on the impact of outbound trade shows on SMEs in South Africa. It was organized by the Government Communication and Information System (GCIS) in collaboration with the Ministry of Trade, Industry and Competition on Tuesday.

The country and the African continent are still suffering from a “trade deficit”.

“We just don’t trade enough with each other. The consequence of [this] is that we’re really not cultivating that dividend associated with the kind of population size that we have,” he said.

This particular problem is old.

“The continent was previously intended for an entirely different purpose, which was simply to extract [resources]rather than investing in the continent.

“Now you would have imagined that since the end of colonization since the 1950s, and of course until 1994, there would have been a more coordinated approach to say, how to reverse the trends and the business models associated with what we have used for a very long time as a continent.”

Unfortunately, he said, the continent has not done enough to reverse these trends.

He hailed the entry into force of the African Continental Free Trade Agreement (AfCFTA) in 2018, saying it would put the continent on a better economic footing compared to other parts of the world.

“Other parts of the world have countries that have facilitated cross-border labor migration for goods and services, with the understanding that the easier it is for us to move items from one jurisdiction to another, the cheaper it is for citizens of both countries to be able to trade with each other. We know that this type of free trade agreement has significant benefits,” Sithole said.

In Africa, the structural barriers associated with the movement of goods and services have remained.

“Until we find a way to ease these barriers to access these barriers to market access, we are not going to capitalize to achieve the most optimal levels of trade.

“AfCFTA now having been formalized, the question then becomes whether it is now easier for a small business in South Africa, Burundi or Botswana to be able to say ‘I want to be able to move my goods to another part of the continent “And if it’s a little bit easier, then are we seeing an increase in the volumes of these goods being traded, are we seeing an increase in the value of the goods being traded?

This, he said, would be the litmus test of the continental free trade agreement.

“If it weren’t as good as we would like, it would mean that companies will now have much wider market access, which is a big deal for companies, where the margins may not be strong enough. or where the margins depend on you reaching the scale.

“So issues of access to scale are tied to the issue of the population to which you are able to sell your goods and services. So the wider the market access, the better the chance that those businesses are growing and prospering in the different regions.

Unfortunately, many don’t know a business exists until they arrive at a particular business event and someone finally explains what it’s all about.

“It remains remarkably important for us to be able to promote and to be able to enable many emerging small businesses, to be able to access the platforms, to be able to benefit from the type of visibility, to be able to benefit from this type of market access that allows a lot of more potential business partners – not only knowing that they exist, but also the fact that they have done a particular job and are willing to engage and collaborate with different partners, especially across the continent. big time. It’s still a very important way to facilitate and enable companies to get some market access.”

Sithole said there was also the broader question of what has been done to enable these companies to not only grow and thrive in the local context, but also become global players.

“Each global business started in a particular community, in a particular setting with a particular support mechanism that enabled it not only to grow in that primary jurisdiction, but to spread its wings across the continent, across the different borders and ultimately across the world,” he said.

Deputy Director General for Export Development, Promotion and Overseas Investment, Lerato Mataboge, said the export mandate was “an essential part of the country’s industrialization agenda”.

She said the Ministry of Trade, Industry and Competition has set up the National Exporter Development Program which aims to increase the number of exporters in the economy.

“The target group are SMEs, also drawn from the ranks of the previously disadvantaged, while taking into account the needs of larger potential and established exporters. A key starting point is a national awareness program aimed at improving and strengthening the South Africa’s export culture through export awareness workshops,” she said.

She said many companies might want to start exporting, but don’t know where to start.

“These workshops have been structured to be short and powerful and are delivered regularly across the country,” she said.

During the 2021/22 fiscal year, the department conducted 18 export awareness seminars across the country which benefited 346 people.

(With contributions from the South African government press release)