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SOUTH AFRICA
South Africa is the largest and most developed economy in Sub-Saharan Africa. Agriculture contributes only 6 percent to South African GDP. Until recently, the bulk of South Africa's agricultural products were marketed through boards. Although South Africa is liberalizing some of the functions of its marketing boards, many of them continue to play a role in export markets. South Africa is phasing down its direct export subsidies under the General Export Incentive Scheme (GEIS). GEIS subsidies were estimated at $15 million in 1995. The South African government also administers two export market promotion programs for all products: the Export Marketing Assistance (EMA) program and the Primary Export Market Research (PEMR) program. No information on funding of these two programs is available.
The government of South Africa's Department of Trade and Industry introduced the GEIS on April 1, 1990. The GEIS is an export subsidy on the local content of the exported product. The GEIS was intended to counterract the anti-export bias in the South African economy. The program operated for an initial 5-year period ending March 31, 1995, but was restructured in that year to restrict its use for primary products and to abolish the program on December 31, 1997 in compliance with South Africa's commitments under the World Trade Organization. The value of GEIS subsidies was estimated at about $15 million in 1995. The bulk of the GEIS subsidies were for processed foods.
The South African Department of Trade and Industry administers the EMA program, a market promotion program. Companies applying for EMA grants must demonstrate past export performance, potential export performance, an export plan, the type of export activity engaged in, local marketing performance, and the intensity of international competition in the market(s) and/or the product(s) in question.
The purpose of the PEMR program is to partially compensate exporters for costs incurred in developing new export markets through personal contacts with potential clients in international markets. Funding will be allocated to businesses that are establishing entirely new outlets for a particular product in a specific country and on other properly defined marketing criteria approved by the Department of Trade and Industry. In its consideration of an application for financial assistance, the Department will require evidence of a desk audit already undertaken by the Department on behalf of the applicant or his principal to determine the viability of the export market for the product in question. Such research must, however, not be a duplication of similar research already conducted or which could be conducted by the Department's overseas trade representative in the country concerned. The compensation will be granted to each business for each product to be marketed in a specific country or properly defined marketing area which meets with the approval of the South African Department of Trade and Industry and will consist of: a 50-percent refund of the cost of an economy class return air ticket plus the cost of transporting samples up to a maximum of $156 (R600.00); and a subsistence allowance of $104(R400) per day for a maximum of 15 days per applicant or his representative.
Through the Collective Market Research (CMR) program, government assistance on a similar basis to that described above is available to recognized trade associations, and other organizations which undertake collective primary market research abroad aimed at capturing new export opportunities.
The government of South Africa also provides financial assistance to well-organized sale and trade missions under the Outward Selling Trade Missions (OSTM) program. The primary objectives of these missions should be to facilitate personal contacts in trade and government circles, to acquire knowledge of trading practices and conditions in potential markets and to identify and exploit new or additional trading opportunities.
Some of the commodity boards such as the Deciduous Fruit Board also conduct promotions of South African agricultural products.
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