Export Course - Part 2

VIRTUAL EXPORTS INTO AFRICA SEMINAR BY – VICKY GHOORUN 13TH October 2021 SAFLEC

Registration of custom code

What you need to know about the African Continental Free Trade Area

Why does Africa need the AfCFTA?

• Trade integration across the African continent has long been limited by outdated border and transport infrastructure and a patchwork of differing regulations across dozens of markets. Governments have often erected trade barriers to defend their markets from regional competition, making it more expensive for countries to trade with near neighbours than countries much further afield.

• Intra-African exports were 16.6% of total exports in 2017, compared with 68.1% in Europe, 59.4% in Asia, 55% in America and 7% in Oceania, according to UNCTAD. Intra-African trade, defined as the average of intra-African exports and imports, was around 2% during the period 2015–17. The share of exports from Africa to the rest of the world ranged from 80% to 90% in 2000-17 – only Oceania had a higher export dependence on the rest of the world in that period.

What are the predicted economic benefits of the AfCFTA?

• The World Bank estimates that by 2035, real income gains from full implementation of the agreement could increase by 7%, or nearly $450bn. By 2035, the volume of total exports would increase by almost 29% relative to business as usual. Intra-continental exports would increase by more than 81%, while exports to non-African countries would rise by 19%.

• The Bank predicts that the agreement could contribute to lifting an additional 30m people from extreme poverty and 68m people from moderate poverty.

• Yet the impact across countries will not be uniform.

The World Bank says that at the very high end, countries like Côte d’Ivoire and Zimbabwe could see income gains of 14% each. At the low end, some – such as Madagascar, Malawi, and Mozambique – would see real income gains of only around 2%

What does the AfCFTA mean for trade tariffs?

• Starting in 2020, signatories to the agreement began to eliminate 90% of tariff lines over a five-year period (10 years for least developed countries, or LDCs).

Starting in 2025, tariffs on an additional 7% of tariff lines will be eliminated over a five-year period (eight years for LDCs).

• Countries within the trade area were given until July to complete their tariff reduction schedules and finalise essential rules of origin, the AfCFTA Secretariat said in January.

How will the AfCFTA work with existing regional trade areas?

• According to an analysis by the World Bank, in the policy areas already covered by subregional preferential trade areas, such as the Common Market for East and South Africa (COMESA), the East African Community (EAC), the Economic Community of West African States (ECOWAS), and the South African Development Community (SADC), the AfCFTA will offer a common regulatory framework, reducing market fragmentation created by different sets of rules.

• Secondly, the AfCFTA will be an opportunity to regulate policy areas important for economic integration that are often regulated in trade agreements but that so far have not been covered in most of Africa’s PTAs, which the Bank says “tend to be shallow”.

What does the AfCFTA say about the free movement of people?

• Policymakers say that the free movement of labour will be a key contributor to the successful functioning of the free trade area, but not all African countries are committed to the concept. Alongside the signing of the establishment of the AfCFTA and the supporting Kigali Declaration, 30 African nations signed the Protocol on Free Movement of Persons which seeks to establish a visa-free zone within the AfCFTA countries. Yet major AfCFTA signatories Nigeria and South Africa have not signed the Protocol and the political will to do so is lacking.

How can Africa ensure AfCFTA succeeds?

The AfCFTA is vital for Africa’s future but it is launching in a difficult global environment.

On October 29, 2020, the WTO nominations committee advanced Ngozi Okonjo-Iweala to the group’s 164 members as the next head of the organisation. She would be the first woman and first African to head the trade body. It was a culmination of months of lobbying and campaigning by African governments and institutions – including Cyril Ramaphosa, the South African president and current chair of the African Union.

In a global economy dominated by continent-sized economies like the US, China, India and the European Union, Africa’s 54 small, balkanised individual units will continue to reap sub-optimal results in global economics and politics. The African Continental Free Trade Area (AfCFTA) presents an opportunity to both bolster intra-regional trade and increase Africa’s negotiating position on the international stage.

But Africa’s perennial position on the bottom rung of the global economic ladder remains a paradox. The continent is home to 17% of the world’s population and the largest share of youth in the world, with 30% of the world’s oil and mineral endowment. Yet Africa is also home to 70% of the world’s poor. Around 30% of the continent’s population lives in landlocked, resource-poor countries, and intra-African trade is the lowest of all regions of the world.

• As a part of its response to this quandary, Africa’s leaders have elected to pool their economic resources and create a single market out of the 54 nations that comprise the African Union. On completion, this would become the largest free trade area in the world. The AfCFTA will cover a market of more than 1.2bn people and up to $3 trillion in combined GDP, with the potential to increase intra-African trade by over 50%. With Nigeria’s ratification of the agreement it is gaining legitimacy and is well on its way to implementation.

Three challenges • First is the impact of the coronavirus: according to the IMF the crisis “threatens to throw the region off its stride, reversing the development progress of recent years and slow the region’s growth prospects in the years to come.”

• Secondly, there’s the unfolding debt crisis, with Zambia as the canary in the coal mine. Debt levels were already elevated before Covid-19 and the pandemic has heightened the crisis. Seventythree countries (low and middle income) at risk of debt distress qualify for the G20’s Debt Service Suspension Initiative (DSSI), which was approved in April. More than a third of those countries are in Africa.

Three challenges • African countries that have not signed up, including Benin, Kenya, Ghana and Nigeria, are concerned that joining the DSSI would affect their credit ratings and close off access to capital markets.

Writing in the Financial Times on 11 October, Ghanaian finance minister Ken Ofori-Atta noted that African finance ministers had requested a debt standstill of two years and $300bn in concessional financing over three years. Even though this is less than 3% of the over $12 trillion that OECD countries have spent shoring up their economies, it is still not available for Africa.

• Finally, we are witnessing a partial unwinding of globalisation and the emergence of a world characterised by rivalry and protectionism.

Three challenges • A recent Pew Research survey showed a majority in most industrialised countries hold a negative opinion of China, the highest levels measured in over a decade. US officials have succeeded in convincing industrialised counterparts in Europe to eschew Chinese hardware in their communication systems.

• The campaign has extended to Egypt and Brazil as the US seeks to build a “clean network”. As the US and China ramp up restrictions and bans on firms from the other country, the trade war will soon reach Africa’s shores – and it could not have picked a worse moment.

Two essential commitments • The three challenges described above make the African economic integration project significantly harder than it already was. But they also drive home the economic exigency and political imperative of seeing the project through. There are currently eight regional economic communities on the continent that range from completely useless to only partially functional. I therefore have two recommendations going forward.

Two essential commitments

Two essential commitments

Exporting to Africa: a beginner’s guide to export compliance

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3 Exporting to Africa Facts • Each country has its own list of what it considers to be ‘regulated’ products. The products are determined based upon product type and identified using HS/Commodity Codes. These products will be subject to the programme.

• Each country also has its own list of exempted products. This means certain categories of goods may not need certification to enter the country.

• Some countries also have a list of prohibited goods which are not allowed to enter the country under any circumstances

How to export from South Africa What are the export registration procedures, export customs process, export cargo movement methods in South Africa? How to export from South Africa? Explain the export methodology in South Africa.

This is a step by step procedures that need to be finished with South Africa government authority for exportation from South Africa.

How to export from South Africa Any legal entities can engage in export or import of commercial goods. All importers and exporters in South Africa are required to register with customs at the South African Revenue Service (SARS). When you register, you will be issued with a customs client number and an exporter registration number.

The South African Revenue Service (SARS) administers the customs department of South Africa. The South African Customs Administration plays an integral role in the facilitation of cross border movement of goods. SARS is legally mandated to enforce the use of Electronic Data Interchange for the submission of certain cargo and goods declarations and reports. Everyone doing business with SARS should register for EDI.

How to export from South Africa SARS offers a Single Administrative Document (SAD) to facilitate customs procedures.

All export documentation must be completed correctly to avoid any missed shipments, port demurrage charges or fines to the business.

Generally in all countries there are three stages of process for export. One time registration procedure to obtain export licence, documentation needed for exportation and Export customs clearance formalities. Detailed information on these three stages of exports has been mentioned separately in this website. You may click below those information links to know more about step by step procedures on how to export

How to export from South Africa Export Registration and Licence procedures Export Customs procedures Export documents required

Export Registration process If you need to export goods or services, a onetime registration procedure is being completed in most of the countries. Such export licence may be obtained from concerned government department if required in the Exporting country.

Usually, for exportation of goods from Exporting country, a onetime export registration to act as an Exporter/Importer is sufficient. However, if restricted items are exported, separate export licence may be required in Exporting country to export such restricted goods.

There is separate government agency in Exporting country that handles and regulates such specific products who issue export license or export permit. However, specific license to export goods is required for certain specific goods restricted to export based on trade policy of respective exporting country. Categories of products classified under freely exportable, restricted to export and prohibited to export are published time to time. The products under Prohibited list of goods are not permitted to export which may be referred the official website of Exporting country.

Customs clearance procedures in exporting country This piece of information explains about export customs clearance procedures. The information details on how to export goods from an Exporting country port to other overseas destination.

After goods packed for export, necessary export customs clearance documents required by Exporting country’s load port customs are prepared. Invoice cum Packing list and other required export documents for Exporting country’s customs are arranged before movement of export cargo to Customs port of the country. The export documents are filed with Exporting country customs electronically. The cargo is moved from Exporters location to customs location where international carriers are also operated. The export cargo is unloaded at Exporting country’s customs bonded area under the control custodian of cargo. The handling of export cargo at export port location is operated by such custodian in Exporting country.

Once export process is completed by Exporting country’s customs for export, necessary permission is given by customs authorities to move export cargo. Necessary export inspection procedures by Exporting country’s customs authorities are undertaken wherever required. This information explains about export customs clearance procedures in Exporting country. The information details on how to export goods from an Exporting country port to other overseas destination.

Customs Documentation for exports Apart from basic documents, the documents required for export from Exporting country is based on the product exporting from Exporting country, multilateral, bilateral or unilateral trade agreements, and other trade policies of Exporting country government. The export documents required in Exporting country also depends up on the nature of goods exporting (General goods, Personal effects, Dangerous goods, Livestock etc.), regular trade policy of Exporting country Government, specific goods exporting from Exporting country (Arms and ammunition, health products, food products, chemicals etc.)

Customs Documentation for exports

Customs Documentation for exports

Customs Documentation for exports

Customs Documentation for exports

•Thank you for attending and I hope this session was of value