1 year ago

Opportunity Issue 99

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Opportunity magazine is a niche business-to-business publication that explores various investment opportunities within Southern Africa’s economic sectors and looks to provide its readers with first-hand knowledge about South African business. Opportunity also looks to present South African business to international markets that may have interests in investing in South Africa. The publication is endorsed by the South African Chamber of Commerce and Industry (SACCI).

FOREWORD Certificates of

FOREWORD Certificates of Origin breakthrough a world first for South Africa Electronic certificates can now be issued in real time after SACCI signed a historic deal with Department of Trade, Industry and Competition. Alan Mukoki, SACCI CEO Perhaps fortuitously, SACCI has been at the centre of a debate that is over a decade old and culminated in a historic signing event in March 2020, a week before the State of Emergency was declared. The international context of this discussion is vested in the World Trade Organization (WTO), which comprises sovereign states (countries through their respective governments). Observer status has been granted to the International Chamber of Commerce (ICC). During discussions on trade facilitation the ICC took the initiative to draft documentation that has been adopted to accommodate the Rules of Origin by way of instruments known as Certificates of Origin. These are used by importing countries as assurances that the goods imported were indeed manufactured in the exporting country. The prerogative to issue these instruments lies with government. It is important to stress that this cannot be an authority that is vested in the private sector unless the government has extended such authority to the business sector, and this traditionally has been with the national chamber movements. The second part of this issue that requires clarity is that these instruments rely on trade agreements between countries or trading blocks. The agreements underpin the issuing system. So, by way of examples, the African Free Trade Agreement with the USA gives African exporters certain preferential tariff rates – provided the goods originate (are manufactured/produced) in the country of origin, typically the export country. Readers will be more familiar perhaps with the closer to home recent signing of the African Continental Free Trade Agreement (AfCFTA). The key is in the sourcing of the product within the free trade agreement area. During 2018, SACCI was called on to assist the Kenyan Chamber with its approach to the Kenyan government to allow the Chamber to issue Certificates of Origin (CoOs). The right to issue CoOs had previously been withdrawn by the Kenyan government due to ill discipline in issuing CoOs by the private sector. The high level of fraudulent certificates was tarnishing the image of the Kenyan export industries. The two chamber CEOs met with President Kenyatta together with a high-ranking delegate of the ICC in Paris, who collectively convinced the President to reinstate the right to issue with the Kenyan Chamber. Going back in time, circa 2010, chambers of commerce and industry issued Certificates of Origin for our export industries but, much like Kenya, the bad discipline in the market had become a cause for concern for our government. A high-level meeting was called by the Department of Trade and Industry (now dtic) through Business Unity South Africa with the national chamber movements. Present were NAFCOC (National African Federated Chamber Commerce), FABCOS (Foundation for Business and Consumer services), AHI (Afrikaans HandelsInstituut) and SACCI (South African Chamber of Commerce and Industry). The purpose of the meeting was to advise the chambers that government intended to withdraw issuing rights in favour of SANAS (South African National Accreditation System), an agency of government. The rationale given was that there were too many fraudulent certificates compromising South Africa’s reputation in the international trading community. SACCI motivated for the rights to remain with the private sector as many chambers relied on the certificate revenue streams for their survival. Reluctantly government conceded, provided certain checks and balances were put in place. This was followed by the signing of a generic MOU (Memorandum of Understanding) between the dti and SACCI, but the document basically served as a wish list. There 8 |

FOREWORD _________________ A system that creates trust results in a more confident purchase of South African goods by the international community. ________________ were no tangible compliance issues raised in the agreement. The net result was that the breaches of discipline continued and SACCI’s agreements were toothless, as no compulsion existed for the market to comply. Fast-forward to 2019 and the situation of fraudulent certificates was again becoming a visible problem for our image internationally. At this juncture, SACCI decided to take the initiative to seek out best practices in the world. Hundreds of hours were spent analysing and benchmarking. The outcome was a set of comprehensive documents drafted around accreditation and auditing functions. These were submitted to government and after three interactions between SACCI and the dtic a historic agreement was signed on 23 March 2020. A system that creates trust results in a more confident purchase of South African goods by the international community. Even in a lockdown-restrictive environment, South African exports are rising. This feeds economic growth, job creation and greater spend in the domestic market which has a multiplier effect with positive results for South Africa, Southern Africa and the African continent. Post Covid, South Africa must become the funnel of foreign direct investment in a market that is visibly growing and the preferred destination for foreign investors. In short, this all has to make business sense. Credible and electronic Much effort has been expended on building trust between government and the private sector by SACCI. The organisation has built bridges with the Department, SARS Customs, international customs administrations, embassies and diplomatic corps in South Africa. In addition, a credible system with electronic certificates issued in real time has been built, encrypted to ensure easy verification and access by government agencies. This has tightened the noose on the fraudulent industry. This is, by all accounts, a world first. Electronic registers, signatories, training to SAQA standards and a public display of accreditation certificates to educate the market are all part of this initiative, together with the setting up of SACCI agencies to better service the market and introduce competition to ensure that monopolistic practices are addressed. SACCI is also preferring young, black-owned agencies with the intention of creating new businesses, new jobs and a fairer distribution of the issuance cake. Demand for better service offerings will also result in keener pricing structures to the benefit of the consumers and users of the system. SACCI is also currently working with law enforcement agencies on criminal cases against fraudsters and the organisation has made strides in engaging with government agencies to raise the profile of our export community in the eyes of the world. Certificates of Origin provide proof that an item is manufactured where it is claimed that the item is made. These cars are made in Kariega in the Eastern Cape. Credit: Volkswagen South Africa | 9

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