AFRICA E-TRADE TO IMPROVE QUALITY OF LIFE

(In Johannesburg courtesy of the
Friedrich Ebert Stiftung)

JOHANNESBURG – With the Kingdom of Eswatini having officially launched its status as the Southern Africa regional quarters of the Africa e-Trade hub, a lot of benefits await its citizens.

This is the view of Beatrice Chaytor, who is Senior Expert –Trade in Services in the Department of Trade and Industry at the African Union Commission.
Speaking at the ongoing World Trade Organisation (WTO) Conference on Multilateral Trade Systems in Johannesburg, South Africa, Chaytor said there were a number of ways that Eswatini can benefit from e-commerce.

“The development of e-commerce is likely to catalyse the digital economy in the country. Most goods are traded through digital means now. So this will help drive more efficient services and will increase trade between Eswatini and other countries on SADC and in the rest of Africa” she said.

The expert further opined: “With increased trade comes increase in government revenue – through indirect taxes and for the people increased income and an expansion in the economy. All this will have a beneficial impact on the quality of life for the citizens.”

The launch of the regional headquarters was held on October 4, 2019 at Mandvulo Grand Hall, Lozitha, in Eswatini and was overseen by His Majesty King Mswati III.

The benefits will accrue to Eswatini despite the existence of a customs duty moratorium on e-commerce transmissions.
Vahini Naidu, the Deputy Director of Trade Negotiations in the Department of Trade and Industry in South Africa, revealed that because of the moratorium, countries in Sub Saharan Africa will lose, conservatively, US$2 billion a year (about E30 billion when calculated at the current exchange rate).

“This issue of the moratorium has become a hot topic and a lot of countries including South Africa have been looking at the potential revenue loss. UNCTAD has done a very interesting study which makes a conservative estimate that Sub-Saharan Africa will lose US$2billion in a year, not even over time. North will lose US$1 billion,” she said.

She went on: “And so, as more and more goods are being digitalised and you can purchase them online, the concern is that this is going to make tariff protection or tariffs almost redundant and the issue is that this will subject governments to further revenue loss. One of the concern is that we could use that money to fund digital transformation. I know most governments are starting to look at this, especially the African Union.”

Important
She said there was an important need  for member states to consider the policy and development implications in as far as revenue is concerned in this digital economy and the kinds of rules that are being proposed.
Meanwhile, Vonai Muyambo, the External Relations Officer (Information and External Relations) at the World Trade Organisation in Geneva, said the revenue loss issue was an important issue to consider in the context of what would the possible risks be and what the need is going forward.

She said the argument at the WTO was that there were potential revenue losses that could be made. 
“But others are saying let’s not limit it only to  revenue loss but also as to what are the economic  benefits that the moratorium could bring because it has brought about predictability to the system, so we need to look at how to find a balance. We need to study these things before going forward. The challenge for African countries is that there are those that are moving forward and others have to catch up,” she said.

She said the other discussion was that the moratorium should not affect the ability of a country to put in place other duties and charges. “Like in normal trade, you might have tariffs that you put in place but that doesn’t prevent you from putting other duties and taxes that you might think are relevant. You might need to look at other ways as to whether this moratorium was causing losses or not; where else can we get the money,” Muyambo added.

In April a workshop held at the WTO which provided WTO members with the opportunity to analyse the moratorium on customs duties on electronic transmissions and to examine its implications, particularly from the development perspective.
 The workshop brought together a variety of stakeholders to inform members’ discussions.

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