Southern Africa Services
Exports
20th February 2008
TRALAC Conference, Cape Town
Dr. Nick Charalambides
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Context
Services
Exports
Export competitiveness
Agic, Manufacture
Services
Liberalisation
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Overview
• Where are there opportunities?
• What is happening at country level?
• What are the key drivers of services
exports?
• Where is there most scope for “home
grown” producers?
• What are the constraints for services
exports?
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Global Trends
US$ billions
3000
Travel
2500
Transport
2000
Commercial
1500
1000
500
0
1996
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2005
Computer related services ($ bn)
4.5
9.0
Germany (right axis)
4.0
8.0
3.5
7.0
UK
3.0
6.0
Netherlands
2.5
5.0
USA
2.0
4.0
1.5
3.0
France
1.0
2.0
0.5
1.0
0.0
0.0
1990
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1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
Not only India
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Services exports: Botswana
35 000.0
Pula million
30 000.0
25 000.0
Exports of services
20 000.0
Exports of goods
15 000.0
10 000.0
5 000.0
0.0
97
/
96
9
1
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2
2
2
2
2
2
2
2
2
98
99
00
01
02
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04
05
06
/
/
/
/
/
/
/
/
/
97
98
99
00
01
02
03
04
05
9
9
9
0
0
0
0
0
0
1
1
1
2
2
2
2
2
2
Services exports: Mauritius
Travel
1.3%
1.5%
Transportation
1.6%
Other business services
11.9%
21.8%
60.5%
Communications
services
Health
Computer and
information services
Education
Financial services
Construction services
Insurance services
Personal, cultural,
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Key drivers of exports?
• Characteristics of services: Often
intangible
– Brand and Reputation
– Network of established customers
• FDI has been fundamental in many export
success stories
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FDI and Services Exports
• E.g. of Mauritius the key exporting sectors of
tourism, offshore banking and BPO, foreign firms
account for 84%, 90%, and 80% respectively of
total employment
• Botswana: In tourism, Of the 331 enterprises
licensed and operating between March 1997
and February 2001, more than two thirds were
foreign
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FDI and Services Exports: Ireland
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Opportunities for Home Grown?
• High technical content, low operational risk
• Regional Approach?
– Education
– Financial services
– Construction (S.A. Madagascar)
– Business services
• Niche? Where might the edge be?
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Mobile phone boom in Africa
Million users, from 1998 to 2005
120
Fixed phone
Internet
80
Mobile phone
40
0
1998
Source : ITU, 2006
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2005
M applications?
• The fortune at the bottom of the pyramid:
– Wizzit, MPESA, Smartswitch
– Trade @ Hand
– Too often donor driven
• Tailor made content
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Constraints: Market Access
• Barriers vary greatly by sector, mode, by country
• But OECD markets are generally open to CRS,
ITES (banking, accountancy, professional)
– Challenges generally relate to second order issues
• Data protection (Domestic)
• MRA
• Visas (Business Travel Card)
• Regional: many constraints
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Constraints: Business
• Reputation and Profile
• Market information: 48% of Mauritian
owned enterprises find market information
a serious constraint; 23% for foreign
owned. Services Export Help Desk
• Skilled labour
• Need for fast adaptation of regulation
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Constraint to Opportunity
•
•
•
•
Regional centres of excellence
Mutual recognition
Regional labour market
…Build and share expertise
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Liberalisation not sufficient
• High costs of business services
• But:
– “We are at the “end of the road” (Namibia)
– Sectors are already open but there is little
investment (Lesotho),
– New entrants have not lowered prices by
much (Mozambique)
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Regulation is key to
your competitive edge
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Some challenges
• Why is Botswana, Swaziland not exporting
advertising, BPO, legal services… to the
most important hub of economic activity in
southern African
• … which is one hour away by plane
• What opportunities are there in the region?
• Where is the edge for local entrepreneurs?
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Thank you
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