Pak Africa TRADE Final

8/10/2019 Pak Africa TRADE Final

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African Region Export Strategy

Prepared by:

Asad Hayaud-Din

Dr. Kausar Ali Zaidi

Abu-al-Hassan

Waqas Ahmed


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Index

Topics Page#

Introduction 03

Pak-Africa Relations 06

Important Countries of Africa 06

Main Trade Agreements 09

Pakistans Export Strategy for Africa 13

Trade Statistics of Pakistan with African Countries 14

Major Export destinations in Africa 15

Pakistani Diaspora in Africa 15

Potential Scope of Pakistani Products 16

Bottlenecks 18

Recommendations 19

Ports in Africa (Map) 21

Business Opportunities in Africa 22

Exhibitions in Africa 24

Introduction


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Africa is the world's second-largest and second-most-populouscontinent of the world including

area 30,221,532 km2. Africa's largest country is Algeria, and its smallest country is the

Seychelles. It is the hottest continent on earth; dry lands and deserts comprise 60% of the

entire land surface.

Although Africa has abundantnatural resources but it remains the world's poorest and most

underdeveloped continent, the result of a variety of causes that may include the spread of

deadly diseases (notably HIV/AIDS and malaria), corrupt governments that have often

committed serioushuman rights violations,failedcentral planning,high levels ofilliteracy,lack

of access to foreign capital, and frequent tribal and military conflict. During the president of the

United States Barack Obama's visit to Africa he announced a $7 billion plan to build more

power plants, invest in institutions, and work more closely with African heads of state. He also

unveiled a new program, Trade Africa, to boost imports and exports both with and within the

continent, starting with the East African region known as the EAC.

Geographically Africa is divided in following territories:

Central Africa (Middle Africa)

Country Annual GDP

growth 2010

Annual GDP

growth 2011

Annual GDP

growth 2012

Import of

goods and

services

(annual

%growth)

2011

Export of

goods and

services

(annual

%growth)

2011

Angola 3.40 3.91 6.83 18.59 -6.34Cameroon 3.3 4.1 4.7 14.94 11.47

Central Africa

Republic

1.7 3.3 3.1 . .

Chad 13 1.6 5.02 . .

Congo-Brazzaville 8.75 3.42 3.79 9.97 18.14

Congo-Kinshasa 7.17 6.87 7.15 5.37 20.96

Equatorial

Guinea

-1.68 4.94 2.5 3.84 6.15

Gabon 6.7 7 6.1 ...

Sao Tome and

Principe

4.51 4.94 4

Eastern Africa
http://en.wikipedia.org/wiki/Continenthttp://en.wikipedia.org/wiki/Algeriahttp://en.wikipedia.org/wiki/Seychelleshttp://en.wikipedia.org/wiki/Natural_resourcehttp://en.wikipedia.org/wiki/Human_Development_Indexhttp://en.wikipedia.org/wiki/Diseasehttp://en.wikipedia.org/wiki/HIVhttp://en.wikipedia.org/wiki/AIDShttp://en.wikipedia.org/wiki/Malariahttp://en.wikipedia.org/wiki/Corruption_Perceptions_Indexhttp://en.wikipedia.org/wiki/Human_rights_violationshttp://en.wikipedia.org/wiki/Central_planninghttp://en.wikipedia.org/wiki/Illiteracyhttp://online.wsj.com/article/SB10001424127887323936404578577862807993572.htmlhttp://online.wsj.com/article/SB10001424127887323936404578577862807993572.htmlhttp://en.wikipedia.org/wiki/Illiteracyhttp://en.wikipedia.org/wiki/Central_planninghttp://en.wikipedia.org/wiki/Human_rights_violationshttp://en.wikipedia.org/wiki/Corruption_Perceptions_Indexhttp://en.wikipedia.org/wiki/Malariahttp://en.wikipedia.org/wiki/AIDShttp://en.wikipedia.org/wiki/HIVhttp://en.wikipedia.org/wiki/Diseasehttp://en.wikipedia.org/wiki/Human_Development_Indexhttp://en.wikipedia.org/wiki/Natural_resourcehttp://en.wikipedia.org/wiki/Seychelleshttp://en.wikipedia.org/wiki/Algeriahttp://en.wikipedia.org/wiki/Continent


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Burundi 3.78 4.19 4.03 -14.58 1.74

Comoros 2.05 2.22 2.96

Djibouti 5.0 3.5 3.5 ...

Eritrea 2.19 8.67 7.10 10.56 233.06

Ethiopia 9.93 7.29 8.5 -5.47 2.67

Kenya 5.80 4.37 4.55 15.61 6.62Madagascar 0.52 1.86 3.1

Malawi 6.53 4.34 1.88 -8.69 4.62

Mauritius 7.68 3.76 3.16

Mozambique 7.08 7.32 7.4 11.06 4.18

Rwanda 7.21 8.23 7.98 14.35 47.67

Seychelles 7.12 5 2.9

Somalia 2.6

Tanzania 7.04 6.44 6.85 47.94 27.49

Uganda 5.86 6.62 3.42 5.91 13.17

Zambia 7.62 6.83 7.31 14.95 2.39

Zimbabwe 9.62 9.37 5.01 20.21 17.73

Northern Africa

Algeria 3.6 2.4 2.5

Egypt 5.13 1.77 2.14 8.40 1.24

Libya -1.4 3.7 -59.7

Morocco 3.64 4.98 2.69 5.03 2.12

South Sudan 4.21 1.92 -55.81 8.37 -2.12

Sudan 3.47 -3.29 -10.1

Tunisia 3 -2 3.6 -9.17 -3.87

Southern Africa

Botswana 8.59 6.07 3.69 19.22 27.54

Lesotho 7.86 3.73 3.96 4.59 1.52

Namibia 6.27 5.67 5.01 -0.14 -8.15

South Africa 3.08 3.45 2.54 9.71 5.93

Swaziland 1.2 1.9 0.7 5.23 19.73

Western Africa

Benin 2.55 3.53 5.399 Burkina Faso 7.93 4.21 10.03 19.32 32.36

Cape Verde 5.20 5.04 4.29

Cote dlvoire 2.39 -4.72 9.49

Gambia 6.52 -4.29 6.01 -4.29 17.59

Ghana 8.04 15.07 7.91 47.72 30.13

Guinea 1.93 3.90 3.94

Guinea Bissau 1.71 5.7 -1.5


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Liberia 10.9 9.44 10.8 7.15 2.53

Mali 5.81 2.73 -1.18

Mauritania 5.08 3.95 7.56 10.92 5.23

Niger -7.96 2.29 11.2

Nigeria 7.97 7.355 6.55

Senegal 4.13 2.63 3.96 6.88 3.11Sierra Leone 5.44 6.02 15.2 63.77 -2.02

Togo 3.99 4.79 5.62 8.38 10.73


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Pak-Africa Relations

The independent African states and Pakistan are among the developing countries which are

aiming at rapid development and economic independence. Pakistan shares with the African

nations more or less a common background and similar post independence problems.

Therefore, Pakistan has sought closer economic, social and cultural cooperation with the

African nation states. Since independence Pakistan has staunchly supported Africas efforts to

rid the continent of colonialism and racialism.

Pakistan and South Africa have tremendous scope to improve trade and economic relations. At

present, the trade between the two countries is very nominal as South Africa's trade with world

is US $75 to US $ 80 billion and its trade with Pakistan is less than one percent of its total trade.

One of delegation head of South Africa said that his country was in need of experts in science

and mathematics fields and offered that joint ventures to tap the potential of mining sector of

Pakistan. South Africa has expertise in this field and has been using modern technology.

Pakistan has one of the finest quality coals and South Africa is ready to assist Pakistan in

exploiting its coal reserves for power generation.

Beside that South Africa also offers excellent transport facilities including ports and

international airports for the exports of goods. African continent is the second fastest growing

region after Asia and Pakistani businessmen could achieve lucrative results by improving trade

cooperation with South Africa. South Africa is rich in mineral and other natural resources and

wishes to encourage Pakistani investors to set up manufacturing plants in South Africa. They

offer many attractive incentives to investors and more importantly South Africa is regarded as a

gateway into Africa.

Important Countries of Africa

Nigeria (English Speaking) - The most populated African country at 160+ million. The country

has an extraordinary amount of oil wealth. It is a giant on the continent. Nigerians are found in

large numbers throughout the continent, and are sometimes seen as a bit of a menace/drain in

the countries they inhabit.

South Africa (English Speaking) - The economic giant of the continent, it has a much higher

standard of living than most of the rest of the continent, however there are still huge swathesof population living in abject poverty. Johannesburg alone accounts for 10% of the entire

economy of the entire continent. Gold and mineral wealth abounds, diamonds and a healthy

manufacturing sector contribute to it's wealth. It is also notable for the fairly large (~12%) white

population.

Ethiopia (Amharic Speaking) - Is another giant in terms of population, but is incredibly poor,

with a much undeveloped agricultural economy. However, it seems to exert a lot of influence


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across the continent. Ethiopia has one of the most distinct cultures on the continent, with the

only written dialect originating on the African continent. It was also the only Sub-Saharan

African country to not be fully colonized by a European power.

Democratic Republic of Congo (French Speaking) -This is hardly a functioning state, but should

be noted for it's sheer size and potentially massive wealth of resources. The country is huge andvirtually ungovernable, but even though it has huge areas of untouched natural areas it also has

a sizable population. It is one of the last "Wild West's" in the world.

Egypt (Arabic Speaking) - A massive population and definitely an African power, but their face is

firmly pointed towards the Middle-East. The country does have a lot of influence and power,

but it does not concern itself in African affairs as much as it does towards the ME. It does have

some money, but huge portions of the population are very poor.

Ghana(English Speaking) - Not the most populated or richest, but probably the most successful

country in terms of fostering a healthy, stable democracy, good governance, and an extremely

fast growing economy. It has a lot of potential and has been very well managed. It has the

corruption associated with any under-developed country, but it has a well educated middle

class growing healthily.

Kenya (English Speaking) - Kenya is the typical safari tourist destination that is often seen on

nature shows. Nomadic tribes and hordes of animals dot the landscape. It is very diverse with

desolate lawlessness out backs towards the Ethiopian and Somali borders, but it also has a very

sophisticated and cosmopolitan urban life in Nairobi, with a decent population of descendants

of Indian laborers brought by the British. More often than not these Indians are very wealthy

indeed.

Tanzania (English Speaking) - A huge country that is home to widely spread-out towns and

agricultural communities. Some of these outposts can be pretty isolated and poor, but like

Kenya, the primary city Dar Es Salaam is pretty happening and is home to all kinds of wealthy

people, as well as slums like Nairobi. Off the coast of Tanzania is the tourist destination of

Zanzibar, an idyllic and beautiful place, formerly the seat of the Sultan of Oman. For this reason

this island and the coasts of Tanzania and Kenya are much more Islamic than the interior.

Uganda (English Speaking) - Uganda is a beautiful little gem of a country, very densely

populated in the lush green hills dotted by lakes, rivers and waterfalls. Like Tanzania and Kenya

it is encircling part of the massive Lake Victoria. They just discovered oil under one of the lakes;

could mean riches, could mean trouble, most likely both.

Mali (French Officially) - Mali is a country smack dab in the heart of the Sahara desert where all

population centres are formed along rivers and trade routes. It is a vast country of considerable

wealth in the form of gold and minerals. Before Columbus sailed the ocean blue, it used to

provide most of Europe and the Middle-East with gold for trade, during this time it had a large

population of some of the worldsleading scholars and intellectuals (Timbuktu). However with

the influx of New World gold the Malian Empire collapsed. These days it is a cultural tour de


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force, with a healthy music scene and unique culture. Unfortunately, nomadic tribesmen from

the north have gotten hold of Libyan arms that have been circulating since the fall of Gaddafi,

and they are causing trouble in the northern half of the country.

Libya (Arabic) - Libya has a very small population of ~6 or 7 million (compared to Egypt with 90

million+), and it has an extraordinary amount of oil wealth. Under Gaddafi people actually livedpretty well, with a government social structure that provided education and healthcare as well

as other benefits. However, much of Libya's story is the story of Moamar Gaddafi, during his

rule from 1969-2011 he ammassed a huge military stock-pile and was constantly meddling in

the affairs of other countries. He used to fund insurgencies in the Philippines, Thailand and

even gave support to the Irish Republican Army (terrorists), just to destabilize his enemies and

possibly gain favour with some new regime.

Rwanda - (French Officially, Changing to English) - Rwanda is a tiny country known mainly for

the genocide they had in 1994 where some 800,000 people were killed. However this horrible

past does not paint an accurate picture of the country today. Today it is one of the most orderly

and peacefully prosperous countries on the continent. It is being lead by a very smart president,

Mr Paul Kagame, like Uganda's Museveni he is also a former rebel commander, but he has been

very proactive in moving the country forward. It has attracted alot of positive attention in

recent years for being a very promising little country. Rwanda siphons off hundreds of millions

of dollars from the Eastern Congo through various means that are somewhat unlawful. It is

receiving alot of foreign investment and is also one to watch.

Zimbabwe (Speaks English) - Zimbabwe is a shell of it's former self. It is important for it's

potential and for the role it used to play on the continent, but few countries have experienced

such a fall from grace like Zimbabwe. Like South Africa it used to be home to a significant white

population that also used to govern the country, but the majority has left due to "land

reclamations" and maltreatment by the horrible regime of Robert Mugabe who took over in

1980. It is also one of the most beautiful countries on this green earth.


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Main Trade Agreements between South Africa and the rest of the World

Customs UnionSouthern African

Customs Union

(SACU)

Customs

Union

South Africa,

Botswana,

Lesotho,

Namibia and

Swaziland

Duty free

movement of

goods with a

common external

tariff on goods

entering any of

the countries from

outside the SACU

All products

Free Trade Agreements (FTAs)

Southern African

Development

Community(SADC) FTA

Free Trade

Agreement

Between 12

SADC Member

States

A FTA, with 85%

duty-free trade

achieved in 2008.The 15% of trade,

constituting the

"sensitive list", is

expected to be

liberalised from

2009 to 2012

when SADC attains

the status of a

fully-fledged FTA

with almost all

tariff lines tradedduty free.

Most products

Trade,

Development and

Cooperation

Agreement

(TDCA)

Free Trade

Agreement

South Africa

and the

European

Union (EU)

The EU offered to

liberalise 95% of

its duties on South

African originating

products by 2010.

In turn, by 2012,

South Africa

offered to

liberalise 86% ofits duties on EU

originating

products.

There is currently

a review of the

agreement

underway, which

is aimed at

broadening the

scope of product

coverage. This is

taking place underthe auspices of the

Economic

Partnership

Agreement (EPA)

negotiations

between SADC

and the EU


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EFTA-SACU Free

Trade Agreement

(FTA)

Free Trade

Agreement

SACU and the

European Free

Trade

Association

(EFTA) -Iceland,

Liechtenstein,Norway and

Switzerland

Tariff reductions

on selected goods

Industrial goods

(including fish and

other marine

products) and

processed

agriculturalproducts. Basic

agricultural

products are

covered by

bilateral

agreements with

individual EFTA

States

Preferential Trade Agreements (PTAs)SACU-Southern

Common Market

(Mercosur) PTA

Preferential

Trade

Agreement

SACU and

Argentina,

Brazil, Paraguay

and Uruguay

Tariff reductions

on selected goods.

It is not expected

to enter into force

before some time

in 2012

About 1,000

product lines on

each side of the

border

Zimbabwe/South

Africa bilateral

trade agreement

Bilateral

Preferential

Trade

Agreement

South Africa

and Zimbabwe

Preferential rates

of duty, rebates

and quotas on

certain goods

traded betweenthe two countries

Selected goods. A

most recent

version of the

agreement was

signed in August1996, which

lowers tariffs and

quotas on textile

imports into South

Africa.

Non-reciprocal Trade Arrangements

Generalised

System of

Preferences (GSP)

Unilateral

preferences

granted underthe enabling

clause of the

WTO that are

not

contractually

binding upon

the

Offered to

South Africa as

developingcountry by the

EU, Norway,

Switzerland,

Russia, Turkey,

the US, Canada

and Japan

Products from

developing

countries qualifyfor preferential

market access

Specified

industrial and

agriculturalproducts


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benefactors

Africa Growth

and Opportunity

Act (AGOA)

Unilateral

assistance

measure

Granted by the

US to 39 Sub-

Saharan African

(SSA) countries

Preferential access

to the US market

through lower

tariffs or no tariffs

on some products

Duty free access

to the US market

under the

combined

AGOA/GSPprogramme stands

at approximately

7,000 product

tariff lines.

Other Agreements

Trade,

Investment and

Development

CooperationAgreement

(TIDCA)

Cooperative

framework

agreement

SACU and US Makes provision

for the parties to

negotiate and sign

agreementsrelating to sanitary

and phyto-sanitary

measures (SPS),

customs

cooperation and

technical barriers

to trade (TBT). It

also establishes a

forum of

engagement of

any matters ofmutual interest,

including capacity-

building and trade

and investment

promotion.

None

Trade and

Investment

Framework

Agreement (TIFA)

Bilateral

agreement

South Africa

and US

Provides a

bilateral forum for

the two countries

to address issues

of interest,including AGOA,

TIDCA, trade and

investment

promotion, non-

tariff barriers, SPS,

infrastructure and

others.

None


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Current Trade Negotiations

SACU-India PTA Preferential

Trade

Agreement

SACU and India Tariff reductions

on selected goods

SACU and India

are in the process

of exchanging

tariff requestsSADC-EAC-

COMESA

Tripartite FTA

Free Trade

Agreement

26 countries

with a

combined GDP

of US$860

billion and a

combined

population of

approximately

590 million

people

The Tripartite

Framework

derives its basis

from the Lagos

Plan of Action and

the Abuja Treaty

establishing the

African Economic

Community (AEC),

which requiresrationalization of

the continent's

regional economic

communities. The

FTA will be

negotiated over

the next three

years, with the

possibility of an

additional two

years forcompletion.

The Tripartite

initiative

comprises three

pillars that will be

pursued

concurrently, in

order to ensure an

equitable spread

of the benefits of

regionalintegration:

market

integration,

infrastructure

development and

industrial

development. The

FTA will, as a first

phase, cover only

trade in goods;

services and othertrade-related

areas will be

covered in a

second phase.


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Pakistans Export Strategy for Africa

Export, Imports and Trade Deficit has been a critical issue in our national economic history. We

have been having severe energy crises and critical law and order situation with war on terror on

the ground. In July 2010-2011 Pakistan total export growth was 28.97% and import growth was

18.32%. But in 2011-2012 Pakistan total export growth was 0.09% and import growth 18.33.

Here we are concern to increase Pakistan export to Africa. Southern African Customs Union

(SACU) consists of South Africa, Botswana, Lesotho, Namibia and Swaziland. SACU is

increasingly involved in bilateral FTAs with foreign trade partners. In 2006, SACU also signed an

FTA with theEuropean Free Trade Area (EFTA). African countries are rich in gold, diamond, oil

and other minerals while mountains, rivers, deserts and precious minerals exist in Pakistan. So,

there is a need for taking concrete measures for promoting trade between Pakistan and African

countries. Pak-Africa collaboration in economic, trade and commerce is quite below the desired

level. There is a need to generate more trade and commerce as well as to have a proactive

policy for further cementing brotherly relation. What should be strategy for that is given below

in some points:

At present our exports are highly concentrated in five products namely cotton, leather,

rice, synthetic and textiles which account for 78% of our exports. These items are

generally of low quality and low priced in the international market compared to other

competitive countries. Pakistan is gradually moving towards not only higher value added

products in export of textile manufactures but have added ten more sectors like

engineering goods, marble and granite, fisheries, IT and finance and accounting services

etc., for increasing earning in exports. In addition to diversification of products, newmarkets for the Pakistan's goods can be explored in African countries, South America,

Russia Eastern Europe etc.

Our leather and foot wear sector has significant export potential. The government

should take initiative of research and development support to this sector.

If a product is unique or has important features that are hard to duplicate abroad,

chances are good for finding an export market. So Pakistan has to find those unique

products for African export where competition may be nonexistent or very slight, while

demand may be quite high.

Pakistan and South African should consider signing a free trade agreement and as a firststep, both countries should sign a EHP to improve trade.

Good friendly relations between South Africa and Pakistan should be translated into

thriving trade and economic relations as bilateral trade is confined to few items and

needs to be diversified to take it beyond US$ 1 billion by 2015.
http://www.sacu.int/docs/tradeneg/efta-fta2006.pdfhttp://www.sacu.int/docs/tradeneg/efta-fta2006.pdf


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Exhibition of Pakistani products in the African metropolitan countries would be a

welcoming step and these exhibitions will help in promoting trade and economic

relations between Pakistan and African countries.

Regular exchange of visits among Africa and Pakistani exhibitions and seminars on trade

promotion should be encouraged. This will facilitate identification of areas wheremutual trade and investment are feasible.

With the approach of exporting indirectly through intermediaries, a company engages

the services of an intermediary firm capable of finding foreign markets and buyers for its

products. Export management companies (EMCs), export trading companies (ETCs),

international trade consultants, and other intermediaries can give the exporter access to

well established expertise and trade contacts. Yet, the exporter can still retain

considerable control over the process and can realize some of the other benefits of

exporting, such as learning more about foreign competitors, new technologies, and

other market opportunities. South Africa should consider establish direct air links and shipping with Pakistan to

facilitate bilateral trade.

Trade bodies of both countries should visit and meet on regular basis to create business

friendly relationship exploring new trade avenues. Such visits are usually followed by

beneficial fallouts by way of useful discussions, signing of agreements and MoUs which

facilitate trade, and enhance diplomatic understanding.

Pakistan has recorded significant achievement in the fields of science and technology,

information technology, telecommunications, agriculture and agro allied industries. In

any of the above fields, Pakistani experience share with African countries will be very

invaluable. This is particularly the case in matters concerning bio-technology, alternative

energy source and above all water management and irrigation being domains where

Pakistan has made great strides.

Trade Statistics of Pakistan with African Countries for last three years are:

Region Avg. Export (last 3

years) US$ Million

Avg. Imports (last 3

years) US$ Million

Trade Balance

(US$ Million)

Eastern Africa 593.730 351.900 241.830

Central Africa 58.080 5.200 52.880

Northern Africa 297.550 520.670 (223.12)

Southern Africa 264.940 347.330 (109.39)

Western Africa 327.940 74.970 252.97

Total (Africa) 1542.240 1327.070 215.17


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Major Export destinations in Africa are:

REGION COUNTRIES

Eastern Africa Kenya, Madagascar, Somalia, Tanzania, Mozambique, Djibouti

Mauritius and Comoros etc

Central Africa Cameron, Liberia

Northern Africa Egypt, Sudan, Algeria, Morocco, Tunisia and Libya etcSouthern Africa South Africa and Lesotho

Western Africa Benin, Guinea, Ghana, Cote d Ivoire, Nigeria, Sierra Leone, Togo

etc.

Major Export Product are Rice, Textile & Made ups, Leather Products, Cement, Sugar, Tractors,

Chemicals, Tents & Camping Equipment and Light Engineering Goods.

Various Institutional mechanisms with African Countries are:

I. Pak-South Africa Joint Ministerial Council (Estab.1999, Last Session in April, 2013)

II.

Pak-Tunisia Joint Ministerial Council (Estab.1992, Last Session in2010)

III. Pak- Senegal Joint Ministerial Council (Estab.2001, No Session held)

IV. Pak-Togo Joint Ministerial Council (proposed on agreement)

V. Pak-Morocco Joint Ministerial Council (Estab.2001, Last Session 2008)

VI. Pak-Angola Joint Ministerial Council (Proposed, no agreement so far)

VII. Pak-Tanzania Joint Ministerial Council (Proposed, no agreement so far)

VIII.

Pak-Libya Joint Ministerial Council (Estab.1974, Last Session in 1998)

IX. Pak-Sudan Joint Ministerial Council (Estab.1991, Last Session in 1996)

X. Pak-Egypt Joint Ministerial Council (Estab.1989)

XI. Pak-Kenya Joint Ministerial Council (Estab.1984, Last Session in 1995)

XII.

Pak- Ethiopia Joint Ministerial Council (Proposed, No agreement so far )

XIII. Pak- Algeria Joint Ministerial Council (Estab.1987, Last Session in 2012)

XIV. Pak- Zimbabwe Joint Ministerial Council (Proposed, No session)

XV. Pak- Nigeria Joint Ministerial Council (Estab.1986, Last Session in 2012)

XVI.

Pak- Mozambique Joint Ministerial Council (Estab.1987, No Session)

Pakistani Diaspora in Africa

Country No Of Peoples Country No Of Peoples

Africa 38249 Niger 62

Libya 30000 Mauritius 43South Africa 2500 Morocco 38

Kenya 1868 Algeria 34

Tanzania 950 Djibouti 30

Egypt 700 Senegal 26

Zimbabwe 400 Comoros 11

Nigeria 292 Madagascar 11

Sudan 200 Seychelles 5


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Botswana 160 Others 773

Ghana 152

Potential Scope of Pakistani Products

South Africa has a very minimal size of industry and its economy depends upon imports.

Pakistani exporters can introduce and promote their products by using South Africa as a

gateway.

Halal Products

The countries with Muslims majority are the most obvious target markets for Halal products

especially for meat and meat products. Central Africa have 17 million Muslims including Congo

6m, Chad 5m, Cameroon 3m. North Africa: More than 181 million Muslims including Egypt 71m,

Algeria 33m, Morocco 31m, Sudan 30m, Tunisia 10m & Libya 6m. More than 92 million Muslims

including Ethiopia 37m, Tanzania 19m, Somalia 9m, Kenya 8m, Uganda 4.5m, Mozambique 4m,Malawi 2.5m, Eritrea 2m, Zambia 1.8m, Madagascar 1.2m and other countries.

1South Africa

only 1.2 million Muslims but important market as Muslims are very particular on Halal products

and thus there is a ready market for Halal products. South Africa also serves as a gateway for

the other Sub Sahara African countries. There are many International Halal certification

companies who have their agents and offices working in Pakistan that can test and certify the

Pakistani products as Halal. Since Pakistan is a Muslim country so we have to assume that all

food and beverage, all cosmetics, all toiletries, all medicines & other related products produced

and exported from Pakistan are Halal. It is estimated, 50 million dollars worth Pakistans Halal

products can be exported to Africa.

Rice

Due to lack of interest displayed so far by the Pakistani exporters, competitor countries are

taking share of South African market in rice. South Africa has a good potential of Pakistani rice

and it is very famous among all the communities in South Africa and a large number of

Pakistani, Indians and South African people purchase Basmati rice due to its taste and aroma. If

Pakistani rice exporters focus on South African market aggressively, trade between both the

countries will increase with a significant ratio. Rice Exporter Association of Pakistan (REAP)

should consider it seriously and they can export worth of 100 million dollars more rice to Africa

than the existing one.

Pakistan and Africa has seasonal difference of crops. So, both countries can also take advantage

of this by trading in seasonal vegetables.

1Halal Development Council (HDC) survey


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Textile

Pakistani textiles have already vast market in South Africa. Pakistan is still interested in the

whole range of textile products such as Yarn, Fabric, Upholstery, Made Ups and Garments to be

exported to South Africa. Import duties and other taxes in South Africa are completely local

need based as it is not the signatory of WTO. There is no levy of anti dumping duty on Pakistanitextile products and nor has any other duty been imposed specifically for Pakistan products,

since it is the same for all countries. Pakistan can increase textile export 250 million dollars

more to Africa.

Pharmaceuticals

Beverages and medicines have a very large volume in Africas imports but Pakistans share is

negligible. Today Pakistan has about 400 pharmaceutical manufacturing units including those

operated by 25 multinationals present in the country. Pakistan Pharma Industry boasts of

quality producers and many units are approved by regulatory authorities all over the world.

Pakistan can export worth of 30-50 million dollars Pharma items to Africa Region.

Stationary products

Africa represents a huge market for stationery products including writing instruments, paper

products, envelopes, fax rolls, photocopy paper, markers, staplers, highlighters, sticky tapes,

note pads, drawing instruments and file covers. Demand for stationery products has registered

a two-fold increase among importers in East African countries because of the increase in the

number of educational institutions as well as commercial organizations. Pakistan has a large

stationary industry, so we have to focus on the export of these products also. Currently, Africais importing these products through Dubai and elsewhere in the Gulf. Industries has to take

advantage of the TDAP`s schemes to support branding, opening of offices abroad and the

warehouse for penetrating African market. It is estimated that 50-100 million dollars Pakistans

export of stationary items to Africa can be done.

Tractor

Pakistan is the only country in the world producing the cheapest (Fiat and MF) moderate quality

branded tractors in the range of USD 7000-9000 only1. Pakistani developed tractor parts are in

high demand all around the world, from Europe to America, to Africa and South Asia. It is

estimated that at present average 3000-4000 tractors are exported out of the country every

year. Pakistan can export tractors to Africa in 75-100 million dollars.

Rickshaw/Motorbike

Pakistan is also producing good quality rickshaws and motorbikes. It can be exported to Africa

worth 50-100 million dollars.


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Skilled Labor

Trade relations could be promoted through mutual exchange of delegations of students,

scholars, doctors and businessmen. Pakistan also has a huge number of skilled labors, whose

services can benefit African industries.

Bottlenecks Market uncertainty and high risk of return of payment. There is not a party who can

provide the guide line either the customer is really a customer or someone make fool

the exporter.

Lack of Pakistani bank facility in South Africa for the Pakistani exporters.

Lack of warehousing facility in Republic of South Africa for Pakistani products.

World Bank report has found that the Somali pirates roaming the waters off the Horn of

Africa push global trade costs up by billions of dollars per year and severely affect the

economic activities of neighboring countries. The World Bank defines piracy-affected

countries as Comoros, Djibouti, Kenya, Mozambique, Madagascar, Mauritius, the

Seychelles, Somalia, Tanzania, as well as Yemen, Pakistan and the countries of thePersian Gulf.

The transport and communications infrastructure in Africa is far less developed than in

other regions, which significantly raises the cost of trading, particularly for landlocked

economies.

Beside these problems, the following graph shows the Africas performance over time:


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Recommendations:

Population of Africa consists of one billion persons and a very big market is there. Huge

precious foreign exchange can be earned by exporting Pakistani products to African countries.Africa is a big trade market and Pakistan should enhance trade relations with Africa. It is

strongly recommended the need for formulating African friendly policies for promoting trade

relations with African countries. We can conclude that South Africa is one of the fastest growing

economies in Africa. Since 1994, particularly, the countrys economy has grown rapidly. South

Africa with its peculiar geographical location and booming economy provides tremendous

opportunities for Pakistani exporters to explore this niche market. For this purpose some

recommendations are given below:

Besides government, steps should also be taken for enhancing contacts at private level.

Pakistan had a tremendous potential for South African businessmen but they could not

make any inroads because of unavailability of proper trade related information.

South Africa can boost its exports to Pakistan of items like chemicals, gold, diamonds,

platinum, metals and minerals, machinery and raw material of steel products to

Pakistan. Similarly, Pakistan could increase export of traditional products, like surgical

equipment, rice, and sport goods to South Africa. Pakistan can supply engineering

goods, sanitary goods, machine tools, auto-parts etc to South Africa.

Pakistan Gem and Jewelry Association may be encouraged to create stronger linkages

for establishing Diamond and Precious Stone Cutting Facilities in Pakistan. Efforts should

also be channelized to create the clusters of Gem and Jewelry industry along with SEZ

status.

Government of Pakistan should also provide cost Difference of the increase in shipping

fare due to pirates problem in the African Seas.

National bank of Pakistan May immediately opens its branch in South Africa and should

also consider opening bank branches at important places in the African region.

It should also be noted that African countries have improved their economy by

promoting tourism. Those vast opportunities of tourism are also available in Pakistan.

Mountains, rivers, historical places, deserts and beautiful tourism places exist in the

country but, unfortunately, no attention was paid to the promotion of tourism. We

should benefit from the experiences of African countries. A comprehensive planning

should be made for the promotion of tourism and countrys exports.

Major commodities exported to South Africa include, Textile, and made-up rice, leather,

surgical instruments, sports goods and cement. Over the period of time some other


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products should also start gaining market access in South Africa like marble, ceramics,

steel utensils, light engineering products (electric fans) match boxes etc.

Government should establish new export processing zones like in Sialkot, Gawadar,

Quetta and Multan for facilitating businesses to export goods.

Warehousing and permanent exhibition facilities should be established at identifiedimportant places in the African region.

If strong Pak-Africa trade would be started then this close cooperation between the two

countries would not only be beneficial for two nations, it would benefit the two regions as

well.


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Ports in Africa:

2

2Source: AFDB, 2010.


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Business Opportunities in Africa

For investment point of view South African government and its multi-cultural society to provide

level playing field to the foreign businessmen to initiate and maintain all sorts of businesses on

large or small scale. Many Pakistanis had been investing their entrepreneur skills to add value

to South Africans micro economy. South Africa being considered the gateway to African

continent had turned more lucrative destination to international investors including Pakistani

exporters. After its well-linked road network and railway infrastructure with the neighboring

Southern African Development Countries (SADC), South Africa has been more accessible for

business people to penetrate in African markets. Pakistani business community has to

emphasize Africa besides their traditional export markets in Europe and USA. This is the need to

cement relationships between Pakistani and South African business leaders to develop new

joint ventures.

South Africa FDI Outflow

Year Value

2011 790 R Million

2010 552 R Million

2009 519 R Million

2008 460 R Million

2007 376 R Million

2006 286 R Million

2005 196 R Million

2004 195 R Million2003 162 R Million

2002 170 R Million

2001 176 R Million

2000 207 R Million

0

100

200

300400

500

600

700

800

900

1 2 3 4 5 6 7 8 9 10 11 12

Series1


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FDI As Percentage

of GDP

South Africa

2008 3.30%

2009 2.00%

2010 0.30%

2011 1.50%

2012 1.20%

Annual FDI

outflows

South Africa

2008 -3.12009 1.2

2010 -0.1

2011 2.8

2012 4.4

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

1 2 3 4 5

Series1

-4

-2

0

2

4

6

1 2 3 4 5

Series1


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Exhibitions in Africa


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Documents

Pak Africa TRADE Final