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Company: Mmadinotshi Tannery & Leather Works
Product: Leather Products

Mmadinotshi Tannery & Leather Works is currently housed at the Gaborone Leather Incubator and specialises in leather products. It ... [more...]

Botswana SMMEs to benefit from the SADC FTA

17/10/2008

The Southern African Development Community (SADC) Free Trade Area (FTA) was launched in August 2008 under the theme “SADC FTA for Growth, Development and Wealth Creation. Of the fourteen SADC member countries eleven are set to participate in the FTA, with the exception of Angola, Malawi, and Democratic Republic of Congo who will take part at a later date when their economies are stronger.

Under the FTA the SADC group of countries will seek to eliminate tariffs and non tariff barriers on substantially all trade amongst themselves. However, each member state maintains its own tariff on non members. The Free Trade Area is seen as a first step towards deeper regional integration ladder with other anticipated future various forms of integration which could include a customs union, and a common market among others. The main aim of the FTA is to allow goods and services produced within the designated area to flow freely across political borders without artificial constraints and hold-ups. This premise is based on the theory of comparative advantage, the basic principle of which is that member countries are able to specialize in goods and services that they can produce relatively more efficiently than their trading partners and hence reap the benefits of mutual exchange. This will lead to increased domestic production, greater business opportunities, access to cheaper inputs and consumer goods at reduced prices through completion, thereby creating more employment opportunities for the people of SADC. FTA also aims at establishing “one stop” border posts which will reduce time spent at the borders. At the moment there are three pilot posts at the borders of Zimbabwe and Mozambique (Forbes – Machipanda), Zimbabwe and Zambia (Chirundu), and South Africa and Mozambique (Lebombo Resaano Garcia).

In light of this new development within the SADC community the Local Enterprise Authority believes that opportunities do exist for the local SMMEs especially those in the manufacturing of goods to grow their businesses to greater heights. The Authority maintains that under the SADC – FTA the local SMMEs are guaranteed access to a larger market within the SADC region with an estimated increase to US$431 billion (currently estimated at US$360 billion), creation of regional value chains across the region, and low input costs. The FTA will facilitate attraction foreign direct investment among member state and more joint ventures. There will also be support to importers and exporters within the region. With a stimulated economic growth there will be employment creation which will reduce the current high levels of poverty within the region. Currently the population of SADC is estimated to be about 170 million people.

 
     
 
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