Free trade area will unite Africa, eradicate acronyms

Time of article published Oct 29, 2013

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When it comes to trade, Africa is strewn with acronyms. AU chairwoman Nkosazana Dlamini Zuma noted yesterday that the continent would do better if there were fewer and larger regional economic communities. To make the situation more unwieldy, some communities have overlapping membership.

There are plans for South Africa to become part of a free trade area (FTA) between 26 countries – with a combined population of 530 million – which belong to three economic communities. South Africa is part of the Southern African Development Community (SADC) which is to partner with the Common Market for Eastern and Southern Africa (Comesa) and the East African Community (EAC),

According to the AU, the EAC shares four member states with Comesa and one with SADC.

Moreover, almost two-thirds of the countries are either in a customs union, or participating in negotiating an alternative customs union to the one they belong to, or are in the process of negotiating two separate customs unions, which would be contrary to World Trade Organisation rules.

After the tripartite initiative was officially launched in 2011, the AU summit decided to fast-track a continental FTA to bring the 54 countries into a single market for goods and services with free movement of business people and investments.

However, there are many obstacles – apart from the need to improve road, rail and air links. Policies and regulations would have to be harmonised. Border officials would have to learn to facilitate movements without a greasing of palms. And xenophobes would have to learn to live peacefully with their neighbours from other parts of Africa.

If the single market could be achieved it would promote intra-African trade, create effective value chains, provide businesses with a massive market, accelerate economic growth – and do away with the multiple acronyms. page 20

Employment Services Bill

The Employment Services Bill is bad legislation, the Department of Labour has implicitly admitted.

The deputy director-general of public employment, Sam Morotoba, recently stated the successful implementation of the bill would hinge on the extent to which it dealt with offenders who did not comply with the legislation. A worrying feature of the proposed bill was its proposal to impose “too low” a fine to regulate private employment agencies that flouted labour laws.

“We are worried this will create a problem when we enforce the legislation, as some offenders will budget for fines. The level at which we impose fines will be a big test. Although through the bill we will not solve or eradicate problems, once it comes into force we will be able to deal with many violations,” he said.

The Labour Court and the Labour Appeal Court have exclusive jurisdiction in all matters arising from the bill. Compliance with the bill is to be policed by the monitoring and enforcement provisions of the Basic Conditions of Employment Act, and the Labour Court may impose fines not exceeding R50 000 if an employer contravenes the provisions of the bill.

Morotoba told the portfolio committee on labour that the state had a duty to intervene in the employment of the vulnerable. “Capacity is something we will need to develop over time to deal with problems of public employment services.”

The bill is one of a raft of labour laws before Parliament for consideration. It was introduced in 1999 when South Africa’s labour laws came up for review.

Some of the bill’s objectives are to help the government with job creation, provide free public employment services and registration of job opportunities, provide for cooperation between private and public sectors, protect vulnerable workers and deal with employment of foreign nationals.

Airline access

The reluctance of many sub-Saharan governments to co-operate with their neighbours means they lose out on opportunities to grow their share of rapidly growing trade and tourism markets, says Chris Zweigenthal, the chief executive of the Airlines Association of Southern Africa.

He warns that it means African airlines’ share of the huge growth expected in business and leisure travel to and within the continent is likely to remain at its present 3 percent while that of the Middle Eastern and European airlines moving in to take advantage of Africa’s growing prosperity will remain at 80 percent.

SAA is already expanding its route network in Africa, helped by a new codeshare agreement with Middle Eastern airline Etihad, after years when protectionism and fear of domination by South Africa kept it out of several countries.

It seems likely to be able to set up hubs in at least one country in west Africa, helping to bridge the distance between OR Tambo International Airport in Johannesburg and some international markets, continuing a policy suggested when Siza Mzimela was chief executive.

Zweigenthal warns that southern Africa’s share of increased airline business is likely to remain at only 3 percent, unless governments relax protectionism of their national airlines and, instead, form alliances, enable flights to and from neighbouring countries, reduce the hassle for travellers by adopting new visa rules, open markets to investment and competition, implement safety standards agreed by the AU and align their emissions policies with measures to address climate change.

Pointing out that Africa contains some of the world’s fastest growing economies and about 12 percent of the world’s population, he says it will have to raise its share of global air traffic to 12 percent to benefit fully from the opportunities opening up.

But the airline industry cannot spread its wings if it remains constrained by conservative government policies.

Edited by Peter DeIonno. With contributions from Ethel Hazelhurst, Wiseman Khuzwayo and Audrey D’Angelo.

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