Trade liberalisation in sub-Saharan Africa: case study of South Africa

A striking feature of South Africa's trade liberalisation is that, until 2995, it did not involve any import liberalisation. The focus of earlier liberalisation wsa the reduction of the anti-export bias, and, on the import side, the replacement of QRs with equivalnet tariffs and other duties. This ditinguishes the process in South Africa from that which has happended in other African liberalisations. A seconddistinction (an the two are in in all liklihood conected) is that South Africa was not pressured into making changes as part of conditions attached to a loan; trade policy has evoloved in response to the perceived needs and problems of the economy, and has had the commitment of government and the support of the perceived beed and problems of the economy, and has had the commitment of government and the support of the businesss community, virtually eliminating the credibility problem. A third noteworthy difference is that South Africa was the first African country with a GATT offer, signifying its new commitment to a more outward-oriented growth strategy. The reintergration of South Africa into Southern African poses a dilema. South African manufacturing firms are felt by other regional manufactueres to be a threat, All countries in the region ar afraid of being swamped by South African trade and investment, or of losing foreign investment to South AFrica. Ob the other hand, South Africa us both a large market for regionally produced goods (including manufactures) and a reliable (though not necessarily cheaper) source of imports which is closer than Europe and North America. Access to the South African market provides both competetion, which should imporve efficiency in production, and opportunities to gain from economies of scale. South African penetration of the region is likely to increase further in the medium term.