SA's Groundnut Is Crumbling

Tariff: Delay Could Shutter R2.5bn Sector

- Ciaran Ryan

Roasted groundnut producers have abandoned their application for tariff protection against imports after waiting five years for a response from government that didn't come.

The investigation into the tariff application should have taken no more than six months, yet five years later there was still no answer from the International Trade Administration Commission of South Africa (Itac), which manages SA's tariff regime.

During the intervening years, roughly R392 million in roasted groundnuts were imported. Now it appears the roasted groundnut industry is to follow long steel production to the tariff graveyard.

"The cost of not taking decisions is severe, as demonstrated by what happened here," says Donald MacKay, CEO of XA Global Trade Advisors.

Whether the roasted groundnut industry is worthy of tariff protection is not the issue, he adds. This bureaucratic inaction is likely to lead to job losses and a R2.5 billion a year hit to the economy.

Job losses 'a direct result'