Trade Hub Assesses State of Road Transport Service Sector in Southern Africa

In most SADC member countries, the service sector makes up approximately half of GDP and is a major contributor to employment. The service sector is also a key contributor to national competitiveness and development. Policies that tend to improve the efficiency of the service sector are thus highly significant for economic growth.

During its first year, SATH selected the road transport service sector – including transport operators, freight forwarders, customs agents, and transport regulators such as the departments of road safety – as its primary target for interventions.

Strategically, this focus complements SATH's ongoing work in the areas of trade facilitation and customs. While much of SATH's work in these areas center on identifying and removing barriers to the movement of goods which are being transported by road, the trade in services agenda offers a different perspective on the sector. Rather than assessing the transport sector as an element of the infrastructure for trade, SATH's trade in services agenda takes a closer look at the industry as an important area of economic activity in itself. A natural corollary of this is that there is a greater emphasis on the private sector as well as the regulators of the industry.

This year, SATH commenced two regional diagnostic studies – one on the private sector and the other on regulators for the road freight industry – to gain a better appreciation of the trade in services issues affecting the sector and to provide a solid foundation for SATH's further interventions in the sector over the course of the project's lifespan. To date, the diagnostic studies have been completed for Malawi, Botswana, Mozambique and Namibia.

In order to assess the capacity of the private sector and regulators, a SATH team met with a number of key persons in the industry including private sector associations representing the road transport industry, transport operators themselves, freight forwarders, customs agents, representatives of the agencies that regulate the industry as well as policy makers for the transport sector and trade officials.

Discussions across the different countries raised a number of common issues such as problems related to low levels of harmonization of regulations, standards and charges. They also raised country specific issues such as domestic regulations within countries which impinge on the capacity of their respective private sector operators to efficiently engage in cross-border road transport services.

The studies provided a snapshot of the types of legal and economic issues confronting private sector operators and regulators, the ways in which they were addressing the challenges they faced, the gaps in terms of policymaking and regulatory responses to these challenges, and the forms of consultative mechanisms which exist between the policymakers in the Ministries of Trade and Transport, the regulators and the private sector.

The diagnostic studies will culminate in a stakeholder workshop, scheduled for September. The event will provide a platform for SATH to present the results of the diagnostic studies and to develop the way forward for its future trade in services activities by proposing specific projects. In addition, the workshop represents an important opportunity to elicit feedback from regulators and private sector actors on the proposed projects, enabling SATH's activities to be even more closely tailored to the needs of stakeholder groups and to ensure stakeholder support for these activities.