Delayed decision-making on import duties is costing South Africa billions, and the bulk of the problem rests with ministers, says an industry expert.
The"bulk" of delays when it comes to decision-making on import duty changes for certain products sit with the ministers of finance and trade, industry and competition, according to a trade industry expert.
According to XA Global Advisors CEO Donald Mackay, issues crop up when ministers have to sign off on the duties."The bulk of the delays sit with the ministers. Why are these delays occurring? We don't know for sure," said Mackay. He added that it wasn't clear whether the delays were with the Department of Trade, Industry and Competition or National Treasury.
In terms of the International Trade Administration Act of 2002, ITAC – which is responsible for anti-dumping, safeguard and customs duty investigations – is to inform the Southern African Customs Union of all applications it receives. In terms of the SACU agreement - which includes member nations Botswana, Eswatini, Lesotho and Namibia - ITAC is to make recommendations to the SACU Tariff Board, after considering an application.
In South Africa, there have been two court cases where the ability of the finance minister to make decisions on duty changes was challenged. In both matters, the court ruled that the finance minister is the final decision-maker on duty changes. To shorten the time frames to implement tariff changes, interference by ministers needs to stop, and ITAC also needs to brush up its internal operations."I am not aware of a single ITAC investigation that managed to conclude in 12 months in the last five years, and there were only two in the last 15 years," said Brink. According to XA Global Trade Advisors, most applications take close to two years to finalise, which is hardly ideal and impacts investment decisions.
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