Sunday, March 7, 2021

Botswana, Namibia trading through SA

Despite what the Southern African Development Community expresses in black and white, the experience of Cupidolls International Perfumes in Gaborone shows that the real integration of regional economies remains pie in the sky.

Cupidolls’ managing director, Thresia Hamman, says that when they set up in Botswana, one very important consideration for them was the country’s central location.

Botswana’s nearness to Namibia was particularly important because the latter is a lucrative market for the company. However, Cupidolls now finds that its banking transactions have to be routed through South Africa and that rather than be sent straight to Namibia, its perfumes have to go through South Africa.

Cupidolls uses a mail-order system through which it sends its Namibian customers perfumes and those customers pay through the bank. In the past when these customers have had to deal with the company’s head office in East London, there were no problems on account of the level of integration between the South African and Namibian economies.

Problems arose with having to send money from Namibia to Botswana because the money has to go through South Africa. As has happened, three cooks can spoil the broth. At the time of the interview, Hamman said that some money had been deposited into the company’s bank account but it was unclear who the depositors were.

“We don’t know whose money it is and we can’t send the perfumes. This is hurting our company because customers are complaining; they are saying that we are at fault when that is not the case,” she said.

Namibia and South Africa use the same currency (rand) while Botswana uses the pula. This has implications for pricing.

Cupidolls also finds itself unable to enjoy the distance advantage that should have come with setting up in Botswana in order to service the Namibian market. Hamman says that they had hoped that their perfumes would go straight to Namibia but that they have to go through South Africa because the courier company (which the company has a long and good relationship with) doesn’t have a direct Botswana-Namibia service.

While English is the official language in both Botswana and Namibia, Afrikaans remains an important commercial language in the latter which was a South African colony for 71 years. For its Botswana office, Cupidolls has had to hire an Afrikaans-speaking staffer from the Kgalagadi district where this language is widely spoken.

Officially, intra-African trade is a priority for the continent as well as regional economic communities like SADC. In January 2012, the African Union Summit of Heads of State and Government in January 2012 focused on the theme of “Boosting Intra-Africa Trade.” The reality though is that the integration level, even for neighbouring countries, is still very low.


Read this week's paper