Red tape limits African trade 'more than graft'

STIFLING red tape rather than corruption is the main inhibitor to trade in Africa, says Christo Wiese, chairman of Shoprite Holdings and Pepkor.

Speaking at the Cape Town Press Club on Wednesday, Mr Wiese said intra-African trade only consists of 15% of the continent’s total movement of goods and services, while the remaining 85% is with the rest of the world.

Quoting his Shoprite Holdings CEO Whitey Basson, Mr Wiese said about 1,600 different forms had to be filled in, most of them required by the South African government, in order to move goods between this country and Mozambique.

"Much more than corruption, it is the stifling red tape in Africa that is inhibiting trade," Mr Wiese said.

In a report examining the barriers that curb cross-border trade on the continent‚ the World Bank said Africa’s largest retailer, Shoprite, spends a hefty $20‚000 (about R220,000) a week on import permits to truck meat‚ milk and other goods to its stores in Zambia alone.

"For all countries it operates in‚ approximately 100 single entry import permits are applied for every week; this can rise up to 300 per week in peak periods‚" the World Bank said in February.

"As a result of these and other requirements‚ there can be up to 1‚600 documents accompanying each truck Shoprite sends with a load that crosses a border in the region."

Despite that, and many other problems that face South Africa and the rest of the continent, Mr Wiese remains upbeat about the future and what is happening commercially and politically. He said at the recent Brics (Brazil, Russia, India, China, South Africa) Business Council summit, participants were told by African businessman Mo Ibrahim that foreign investors were welcome, "but they just had to leave their brown paper envelopes at home".

Mr Wiese said there was plenty of money to be made in Africa if business is conducted in a transparent manner. He said that Shoprite now operated in 17 countries, "and never once did we have to pay a bribe".

Mr Wiese said when Shoprite decided to move into a particular country it followed a programme of first meeting either the president, or prime minister, or other high-ranking government officials.

"They all welcomed us with open arms, because they knew we were there to uplift the living standards of their people," he said.

While Mr Wiese supports the goals of the National Development Plan, he cautioned that a major fault with developmental economics in particular, is that the goals were often set too high and were therefore unattainable. He said the average US citizen consumed 400 times as much as a person living in Mali and if development had to aim for people to consume the same as an American, the Earth would have to be three times as large as it is

Source: www.bdlive.co.za

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