The Dynamics of Trade and Economic Relations in Southern Africa: Current Status and Options for the Future

Abstract

The aim of this paper is to discuss economic and trade relations in Southern Africa, both the current status and options for the future. The region considered covers eleven countries, namely, Zimbabwe, Zambia, Botswana, Lesotho, Tanzania, Angola, Mozambique, Malawi, South Africa, Namibia, and Swaziland. The analysis will cover both trade in commodities and labor. Trade in labor, as a factor of production, will be analyzed between South Africa and the rest of the countries. The implications on both commodity and factor trade are analyzed in a post-apartheid South Africa. Special attention is also given to relations pertaining to the transport, energy sector, financial sector and capita! markets development in the region. We should put it clear at this stage that one broad objective is to analyze how and why the relations among countries will change when the situation in the powerful South African economy normalizes. The paper proposes that SADCC would have to be to substituted by a larger region organization that includes South Africa and Namibia. This new organisation we refer to as the Southern Africa Common Market Area (SACMA). The increasing organization of the world into trading blocs is one compelling raison detre for a new regional organization. The paper also discusses the main impediments to regional trade and proposes policies for trade improvements. The rest of this paper is organized as follows. Section II compares and contrasts the different economies in Southern Africa and Section III looks into the trade issues. In Section IV we shall discuss the trade flows among the countries, noting the most active trade linkages. Trade in factors of production in the form of migrant laborers in South Africa is considered in Section V. The current and future state of the transport and communication sector receives attention in Section VI, while regional energy policies are discussed in Section VII. Policy issues for improving regional trade in Southern Africa are analyzed in Section VIII, and Section IX is the conclusion.