By Moyiga Nduru
JOHANNESBURG, Aug 24 2005 (IPS)

A survey issued this week has revealed optimism about business prospects in the Southern African Development Community (SADC).

This is despite the fact that the region is battling extensive food shortages, and concerns about governance in a number of states.

The results of the second annual SADC Regional Business Climate Survey were made public Tuesday in South Africa’s financial capital, Johannesburg. The study included 541 companies located throughout the 14-member grouping – up from 333 firms in nine SADC countries last year (the 2004 survey was regarded as a pilot project).

The 2005 survey evaluated business confidence in Southern Africa for a year-long period beginning in March this year. It focused primarily on the manufacturing sector; other areas of the economy, such as agriculture and the service industry, accounted for just 20 percent of respondents.

“Current performance for all sectors is positive with the best performance seen in the metal, machinery, vehicles and manufacturing sector within the SADC countries,” Brian Mtonya of the Association of SADC Chambers of Commerce and Industry told journalists at the launch of the study.

The Indian Ocean island of Madagascar, readmitted to SADC last month after an absence of several years, “is perceived as an attractive market for selected manufactured goods, notably chemicals, pharmaceuticals and plastics,” Mtonya said. “However most of the respondents are not yet familiar with Madagascar’s market opportunities and potential.”

The survey also found that 41.2 percent of respondents had programmes in place to deal with HIV/AIDS in the workplace – while 62 percent acknowledged the pandemic was having an effect on their organisations. Southern Africa is the region most affected by AIDS, globally.

However, challenges remain.

“Amongst the 19 identified obstacles to business activities within SADC, fluctuations in exchange rates remain the biggest challenge within the region,” Douglas Reissner of the Namibia Chamber of Commerce and Industry said Tuesday.

These words were echoed by Christoph Stork, senior researcher at the Namibian Economic Policy Research Unit. “Exchange rate fluctuations affect weak currencies of countries like Angola, the Democratic Republic of Congo or Zimbabwe. It also affects strong currencies of countries like South Africa and Namibia,” he told IPS.

In other instances, traders find that they cannot exchange their money for the currencies of neighbouring states at all.

“A marketer crossing from Zambia into Zimbabwe for example, with kwacha, will not get foreign currency: kwacha is not a legal tender in Zimbabwe. The situation is similar in other SADC countries where currency regulations exist,” Justin Chisulo of the Zambia Association of Chambers of Commerce and Industry said in an interview with IPS.

This presents substantial difficulties for the thousands of mostly poor cross-border traders in Southern Africa, which houses an estimated 200 million people.

“It becomes a hassle and the marketer will not export. She will prefer to do business at home, not across the border,” added Chisulo.

He noted that plans were underway to harmonise the currencies of the region. However, this is only scheduled to occur by 2016, according to a report issued last month by the SADC secretariat, located in Botswana’s capital – Gaborone.

According to the survey, onerous customs procedures also continue to pose a barrier to trade within SADC.

“These issues need to be addressed in the most earnest way, in order to develop and grow regional trade, with its further impact on tariff reductions, increased merger and acquisition activities and resultant ‘fair trade’ issues, amongst other implications,” observed the study.

Likewise, visa regulations are seen as a deterrent to regional economic growth. “Visa regulations…should be eased in order to boost trade,” Stork noted.

According to Reissner, the positive results of the survey have far-reaching implications.

“This survey is very important for business people in the region. It’s also taken seriously by foreign investors,” he said.

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