The Southern African Development Community (SADC) Protocol in Transport, now being implemented, shows the potential for growth, with ten transport corridors underway in the region.
The International Trade Centre (ITC), a Geneva-based UN agency, conducted surveys in the 12 countries showing that construction, transportation and financial services all have good potential for regional cooperation and development. These are three of nine services sectors in the region that have well-established firms with export experience. This event focuses on these three sectors because of the partnership potential in building regional transport networks – firms can “bundle” their services in bidding processes to make more competitive offers. For example, three South African firms have just linked up with a Namibian firm in a consortium to construct the Trans-Kalahari railway, valued at $1 billion, linking Botswana mineral reserves to Walvis Bay, Namibia.
In partnership with the Department of Trade and Industry, South Africa (the dti), ITC has convened the meeting to help African firms find new business partners in the region, build new opportunities for regional cooperation and development among service industry associations, and identify challenges affecting growth in trade in services.
Participating countries are Angola, Botswana, Burundi, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Rwanda, South Africa, Swaziland and Zambia.
Trade in services is vital to economic growth in these countries. South Africa, Zambia, Namibia, Mozambique and Mauritius all have service sectors that contribute 60%-70% of their overall gross domestic product; Botswana, Swaziland, Madagascar and Malawi have economies that are based roughly 50% on services.
In South Africa, half of new small businesses are services providers, and services sectors now account for more than 70% of total employment nationally. Services industries account for almost all employment growth, and reflect the most consistent positive performance, according to recent economic indicators.
Services are also the backbone to produce and deliver manufactured goods, yet the potential of services sectors, both in South Africa and on the continent, has been largely untapped. “Think of all the transportation corridors being developed around southern Africa,” says Emmanuel Barreto, ITC’s Senior Adviser on Trade in Services. “How do you make the corridors operational without transit and customs agents, freight forwarders and cargo operators?”
Opening the event are Tshediso Matona, Director General of the dti; Remigius Makumbe, Executive Secretary of SADC; and Stephen Browne, Deputy Executive Director of ITC.
“African companies have a tremendous opportunity to collaborate across borders to increase their export markets,” says Mr Browne. “There are many large development projects taking place in the region that southern African services providers could participate in and benefit from as an entry into SADC markets.”
Also attending are embassy representatives from the 12 countries, the United Nations Development Programme, the African Development Bank, and the Common Market of Eastern and Southern Africa (COMESA).
This is the second “Bridges Across Borders” event to be held in South Africa. In December 2005, the dti and ITC hosted an event that brought together 165 service sector associations from nine SADC countries, with 616 bilateral consultations between participants. Engineering firms from Zambia, Swaziland and South Africa have already created new business partnerships as a result of last year’s event.
Source: International Trade Centre
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