Botswana falls in trade enabling rankings
Boitshepo Majube | Friday April 4, 2014 15:18
This represents a significant slide in rankings from position 54 that the country achieved in 2012. In 2010 Botswana was ranked at position 53.
Published every two years, the Global Enabling Trade Report assesses the quality of policies, infrastructures, and services facilitating the free flow of goods over borders and to their destinations.
At the core of the report, the Enabling Trade Index benchmarks the performance of 138 economies in four critical areas: market access, border administration, infrastructure, and operating environment.
Botswana performed well in domestic market access in which the country was ranked 24th out of 138 countries (previously 19 with score of 5.41), scoring 5.4 out of a total of 7. However, Botswana faired badly in foreign market access ranking 124 out of 138 countries with a score 1.9 out of 7. In 2012 Botswana was ranked 85th in foreign market access, with a score of 2.35.
The country also faired badly in efficiency and transparency of border administration scoring 3.5 and ranked number 107 out of 138, previously ranked 60 with a score of 4.17. Under infrastructure the country is ranked 86th with a 3.5 score (previously 74 with score of 3.78). Botswana’s operating environment is ranked at 62, scoring 4.2, previously 33 with a score of 4.89.
The three most Botswana problematic factors for exporting according to the report, is the country’s ability to identify potential markets and buyers, inappropriate production technology and skills, and access to imported inputs at competitive prices.
Other factors pointed as problematic are access to finance, technical requirements and standard abroad, difficulties in meeting quality/quantity requirements of buyers and high cost or delays caused by international transportation amongst others.
At the top of the list for the most problematic factors for importing to Botswana is burdensome import procedures, followed by high cost delays caused by international transportation, tariffs, high cost or delays caused b y domestic transportation, and domestic technical requirements and standards. Other factors in this instance are inappropriate telecommunication infrastructure, corruption at the border, crime and theft.
The report states that for the 2014 edition, coverage increased from 132 to 138 economies, which together account for 98.8 percent of the world GDP and 98.3 percent of world merchandise trade. Bhutan, Gabon, Guinea, Lao PDR, Liberia, Libya, Malta and Myanmar are covered for the first time, while Syria and Tajikistan were excluded.
According to the report, common barriers to trade in the developing and emerging world include red tape at borders, corruption, inadequate infrastructure, and low levels of security. Among advanced economies, most apply low import tariffs, but some, such as Switzerland, Norway and EU members, have complex tariff regimes that are hard to navigate and act as barriers to trade, too.
“The good news is that some of these barriers, such as inefficiencies related to border clearance, can be removed relatively quickly, at a low cost and using limited political capital,” the report noted.
Mauritius remains the best performer on the African continent at 29th position. “The country is one of the success stories in terms of trade development in Africa and its strong trade performance is reflected in the results it achieves on the ETI,” it states further noting that access to domestic markets is almost completely free, with very low tariff rates (0.8 percentage, on average), and Mauritius also benefits from a high margin of preference on tariffs in target cumbersome border procedures, burdensome customs clearance or lack of transparency on regulations.
It further says as countries wish to seize the momentum created by the favourable environment, the Enabling Trade Index can provide a tool for identifying strengths and weaknesses and tracking progress in enabling trade.