Customs Modernisation – positive impact on Doing Business in South Africa!

October 24, 2012 — 4 Comments

South Africa ranks 39th out of 185 countries surveyed in the latest International Finance Corporation (IFC)-World Bank ‘Doing Business’ report, which was published on Tuesday.Last year, South Africa ranked 35 out of 183 countries assessed.

The country is placed above Qatar and below Israel in the Doing Business 2013 report, which covers issues such as starting a business, dealing with construction permits, getting electricity, registering property, accessing credit, protecting investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency.

Singapore remains at the top of the ease-of-doing-business ranking for the seventh consecutive year, followed by Hong Kong and New Zealand. Poland improved the most in making it easier to do business, by implementing four regulatory reforms in the past year.

South Africa led the pack in terms of improving in the ease of trading across borders through its customs modernisation programme, which reduced the time, cost and documents required for international trade. “We hope that through the streamlining of procedures, we will see the growth of commerce in the country,” said coauthor of the report Santiago Croci Downes.

The Doing Business 2013 report stated that improvements in South Africa have effects throughout Southern Africa. “Since overseas goods to and from Botswana, Lesotho, Swaziland and Zimbabwe transit through South Africa, traders in these economies are also enjoying the benefits,” it stated.

Another 21 economies also implemented reforms aimed at making it easier to trade across borders in the past year. Trading across borders remains the easiest in Singapore, while it is the most difficult in Uzbekistan.

Out of the 185 economies assessed in the 2013 report, South Africa ranked 53rd for starting a business, 39th for dealing with construction permits, 79th for registering property, 10th for protecting investors, 32nd for paying taxes, 82nd for enforcing contracts and 84th for resolving insolvency.

The country ranked low, at 150, for ease of access to electricity, while it tied at the top with the UK and Malaysia for ease of access to credit. Croci Downes added that it was still too early to tell whether the recent labour unrest in the mining and transport industries would have an impact on South Africa’s ranking or on foreign direct investment .

Meanwhile, the IFC and World Bank reported that of the 50 economies making the most improvement in business regulation for domestic firms since 2005, 17 were in sub-Saharan Africa.

From June 2011 to June 2012, 28 of 46 governments in sub-Saharan Africa implemented at least one regulatory reform making it easier to do business – a total of 44 reforms.

Mauritius and South Africa were the only African economies among the top 40 in the global ranking. World Bank global indicators and analysis director Augusto Lopez-Claros said Doing Business was about smart business regulations, not necessarily fewer regulations. “We are very encouraged that so many economies in Africa are among the 50 that have made the most improvement since 2005 as captured by the Doing Business indicators.”

IFC human resources director Oumar Seydi added that lower costs of business registrations encouraged entrepreneurship, while simpler business registrations translated to greater employment opportunities in the formal sector.

“Business reforms in Africa will continue to have a strong impact on geopolitical stability. We encourage governments to go beyond their rankings. Ranking does matter, and competition is important, but that is not all that counts. What truly matters is how reforms are positively impacting growing economies,” he said.

African economies that have improved the most since 2005 include Rwanda, Burkina Faso, Mali, Sierra Leone, Ghana, Burundi, Guinea-Bissau, Senegal, Angola, Mauritius, Madagascar, Mozambique, Côte d’Ivoire, Togo, Niger, Nigeria, and São Tomé and Príncipe. Source: http://www.polity.org.za

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4 responses to Customs Modernisation – positive impact on Doing Business in South Africa!

  1. 

    Good to hear about SA. The LPI will tell us more next year.

    I’d say improved in 2012 compared to other economies, but due to surpass them after 2020…perhaps earlier.

  2. 

    This is only partially true. If you are a large business and can afford a room full of admin staff this may be true, but for small businesses like mine it is to say the least painful to deal with SARS and customs.

    There is no sense in SARS of “lets help this new business owner”. The approach is rather “lets make it hard and see if he passes the test”

    I literally wasted weeks to register as importer, exporter, uif, sdl, tax, work.comp, vat.

    I now import electronic components from only one company in the US and manufacture for export on a weekly basis. SARS after a year still opens every package from this huge company and delay it by 2-3 days. I get business from many clients locally and internationally because I am small, flexible and quick. It is the quick competitive advantage that becomes very hard to maintain.

    It is ironic that I order 150 000 parts from this company at midnight SA time. 2 hours later UPS collects the package. This is brilliant, all automated. 2 days later it lands in my City 14 000 miles away often via Europe – well done airlines. Then a week later I get the package after it has gone through a 1 hour process.

    I am not being negative, but have real first hand experience that affect me as I currently work 16 hours a day to get a business off the ground.

    Customs dont need a change in IT systems. They need an attitude of “how can we help you” Instead the staff radiate a sense of “let me see if we can catch you out” which feels insulting if you are honest.

    • 

      Hi Gerhard, thank you very much for your comments. No doubt your remarks will find a lot of empathy and support amongst fellow traders. On a personal level, I fully agree with your sentiments – i.e. while transactional/operational systems are working and in some instances exceeding expectations the ‘coalface of customs’ is not up to speed. If you have no objection I would like to submit your comments to the SARS Operations Team. This is what I call valid and constructive criticsm. Kind Regards.

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