In a post-cabinet briefing on Friday (4 December), the South African government revealed 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 also aims to reduce or eliminate congestion which causes delays, particularly by cross-border travelers 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 statement from cabinet said.
Work is going on round the clock to see to it that the draft policy is gazetted for public comment within the first quarter of 2021.
The move towards this new border policy comes in as the country prepares for the new African Continental Free Trade Area (AfCFTA) which will come into effect from 1 January 2021.
The Pan-African AfCFTA initiative will build an integrated and single African market which pools in over 1.5 billion people people with a combined GDP of approximately US$3.3 trillion.
It is estimated by many independent bodies, including the United Nations Economic Commission for Africa (UNECA) that the AfCFTA will catalyse an increase in intra-Africa trade from the current 10%-16% to approximately 52% by the year 2022.
Mr. Ramaphosa has said that through the AfCTA 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.
Cyril Ramaphosa added that even prior to the agreement on the AfCFTA, the rainbow nation had begun measures to implement an investment-led trade strategy.
He made it known that the country has sought to use its outward foreign direct investment with the African continent being the primary focus, to encourage balanced growth and localisation.
Between 2014 and 2018, companies from South Africa invested over $10 billion – around R160 billion – in different parts of the continent. This figure makes South Africa the fifth-largest source of foreign direct investment in African countries in value only 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.”
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