South Africa to make changes to its borders as it prepares for multi-trillion rand trade deal

 ·4 Dec 2020

President Cyril Ramaphosa’s cabinet has approved a draft One-Stop Border Policy (OSBP) for public consultation.

In a post-cabinet briefing on Friday (4 December), government said that the creation of the OSBP seeks to ‘harmonise the movement of people and goods between South Africa’s land ports of entry and its neighbouring countries’.

The proposals in the policy further seek to address congestion which results in delays, particularly by cross-border travellers and traders.

“This policy gives effect to the One-Stop Border Framework that was adopted by Cabinet in 2018. At a continental level, the policy contributes to the Presidential Infrastructure Champion Initiative, which advances interconnectivity amongst African countries to address infrastructure deficit and boost intra-Africa trade,” the cabinet said.

The draft policy will be gazetted for public comment during the first quarter of 2021.

The new border policy comes in preparation for the new African Continental Free Trade Area (AfCFTA) which will come into effect from 1 January 2021.

The AfCFTA aims to build an integrated market in Africa that will see a pool of over a billion people with a combined GDP of approximately US$3.3 trillion.

The United Nations Economic Commission for Africa estimates that the AfCFTA will increase intra-Africa trade from the current 10%-16% to approximately 52% by the year 2022.

Ramaphosa has said that through the trade area, the continent’s leaders are determined to build strong and inclusive economies through industrialisation and the beneficiation of the minerals and commodities.

“The AfCFTA is a significant development that will change trade patterns and has the potential to transform African economies,” he said in November.

“It will encourage economic diversification, beneficiation of our minerals and resources and value-addition to seize the opportunities arising from an increasingly open African continental market.

“We expect that in the new year, 2021, preferential trade in Africa will begin with significant product coverage and will be further expanded over the coming years,” he said.

Ramaphosa said that even prior to the agreement on the AfCFTA, South Africa had already begun implementing an investment-led trade strategy.

He said that the country has sought to use its outward foreign direct investment in the rest of the continent to encourage balanced growth and localisation.

Between 2014 and 2018, South African firms invested over $10 billion – around R160 billion – in different parts of the continent. This has made South Africa the fifth-largest source of foreign direct investment on the continent in value behind the US, France, UK and China.

“Government has been working to prepare South Africa-based firms for their participation in the AfCFTA,” he said.

“We want to ensure that our firms, entrepreneurs, small enterprises and workers benefit from the trading opportunities that will arise as the AfCFTA commences to operate.”

Read: There are good reasons for limiting how much money can leave South Africa: SARB

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