The South African Chamber of Commerce and Industry (SACCI) has dismissed complaints by the Botswana Confederation of Commerce Industry and Manpower (BOCCIM), Engineering sector that South African companies are blocking out Botswana companies by obtaining Africa-wide agency status from Original Equipment Manufacturer (OEM) worldwide. The complaint raised in the BOCCIM 2013 annual report by sector chair Obed Motsumi says this practice is unfair on Botswana companies. “We feel this practice adds avoidable costs to Botswana’s economy, while preventing Botswana companies from building trade links with OEMs. In this case, business flexibility and the matter of warranties becomes an issue. The value chain becomes unnecessarily long and costly. We believe that Botswana through the Ministry of Trade and Industry and support from BOCCIM should advocate for local companies to deal directly with OEMs, unless such OEMs already have appointed agents in Botswana,” Motsumi said in the report.
SACCI Chief Operations Officer, Peggy Drodskie has dismissed the complaints saying they are unsubstantiated as South African companies cannot “block out” Botswana and other economies. “South African companies cannot prevent OEMs from arranging direct procurement deals with Botswana and other small economies. This would be a contravention of the WTO and indeed of the SACU agreement and the SADC Trade Protocol. Any agreement concerning Africa-wide agency status depends on the requirements of the manufacturer and the ability of the agency to implement those requirements. It would be up to Botswana companies to convince the OEMs of their ability to act as reliable agents. It would be naive for South African companies to tell OEMs that Botswana is part of South Africa and equally naïve of OEMs to believe this,” Drodskie said.
Motsumi also accused SA companies of denying meaningful benefits and trade advantages to Botswana. “The Botswana government has been fleeced, when it should not have been, in the supply of spares, repairs, the calibration of specialised equipment and the building of the necessary local skills and knowledge. What is sad about this is where SA companies inform oversees OEMs to the effect that Botswana is part of SA; meaning that any applicant from SA who requires direct trade links or an independent OEM status should not be entertained,” Motsumi revealed further.
Drodskie also said they did not understand the connection between an assertion that Botswana is part of South Africa and the allegation that this means “that any applicant from South Africa who requires direct trade links or an independent OEM status should not be entertained” or even the meaning of the statement.
The BOCCIM engineering sector in the report further allege that South African companies have an unfair advantage as they also bid against Botswana companies in Botswana, for works awarded by the PPADB or other organizations, which are publicly funded or part owned by the Botswana Government. He also mentioned that what needs to be taken into account is that, even where SA companies lose tender bids they are still able to have a stranglehold on the Botswana companies, through their OEM agency status. This he said should be nullified and called on BOCCIM and Government to address this as Botswana companies have no capacity to do this.
SACCI further called on BOCCIM to utilise structures established by SADC to address barriers to trade that are to address their complaints.