Newsletter No 21/2 June 2023
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SACU members sign mutual recognition arrangement
Johannesburg, 31 May 2023 – Accredited traders in Botswana, Eswatini, Lesotho, Namibia and South Africa will benefit from lower trade costs and quicker turn-around times for imports and exports, because of a Mutual Recognition Arrangement signed today by the five Member States of the Southern African Customs Union (SACU).
The Heads of Revenue Administrations in Botswana, Eswatini, Lesotho, Namibia and South Africa, have agreed to recognise each other’s importers and exporters who have been granted the status of an Authorised Economic Operator (AEO).
Traders who are AEOs across the SACU region will benefit from fast-tracked controls and reduced administration costs for customs clearance.
The Authorised Economic Operator (AEO) progamme is a flagship Customs-Business partnership. It benefits both parties because it offers an opportunity for Customs authorities to share its compliance and security responsibilities with the private sector and at the same time, rewards them with several trade facilitation benefits.
Partnership programmes of this nature with trade will allow revenue administrations to achieve more with less effort, with the goal of ensuring sustainable and long-term voluntary compliance through incentives. These Authorised Economic Operators must maintain high quality internal operational processes and have an appropriate record of compliance and will then, in turn, receive certain benefits to support these businesses.
The AEO programme supports international compliance models working towards a system of increased voluntary compliance. This requires Customs to place more reliance on traders who choose to be compliant.
The Heads of the SACU Revenue Administrations committed themselves “to do the best we can to facilitate cross-regional trade to ensure the success of the Africa Continental Free Trade Agreement, exploring all its opportunities and being alert to respond to all of its risks.
“It is in our hands as leaders of SACU Revenue Administrations to play a key role, in significantly reducing the stubborn residue of poverty, inequality and unemployment amongst our people in our region and beyond.”
The SACU leaders said they believe in partnerships, in order to work with and through others to improve the entire trade eco-system in support of voluntary compliance. “As SACU, we have set out an ambitious programme to improve trade facilitation,” they added.
The SARS Commissioner, Edward Kieswetter, said that “the AEO programme supports SARS’ strategic intent to work towards a system of voluntary compliance. This requires of SARS to place more reliance on taxpayers and traders who choose to be compliant. The AEO Programme does just this! The quid pro quo is a level of accreditation, integrity, and trust mutually built between the parties with tangible benefits in the form of expedited processing and other measures.”
Mr Kieswetter added that today’s signing of the Mutual Recognition Arrangement will further boost trade opportunities and contribute to the smooth flow of goods between SACU countries. The MRA will also strengthen end-to-end supply chain security for trade in goods by promoting multi-layered risk-management and providing facilitation benefits to accredited traders.
During the session today, which was open to the public and media, Mr Kieswetter said Customs must carry out its two complementary mandates – facilitate legitimate trade while enforcing the country’s laws.
“These are not in competition. But we cannot do this on our own – we need you as the industry partners and business leaders, we need our fellow Customs administrators – because a border is a dividing line between two countries, but ports of entry connect our countries. The AEO allows both partners to collaborate beyond their narrow self-interest.
“We must understand that the outcome of our work must be the socio-economic development of every member state so that every African girl child, boy, every granny and every household can benefit,” Mr Kieswetter said.
The Executive Secretary of SACU, Mr Thabo Khasipe, said: “The AEO programme has now been mutually recognised by SACU so that these benefits can extend to compliant and accredited businesses, to operate seamlessly across borders between SACU member states.”
Mr Khasipe urged business to form mutually beneficial partnerships through the AEO programme so that the region can extend economic benefits to all its citizens. “This is a VIP system for trade in the region that can assist in developing the region,” he said.
South African Fashion Week
Mr Price Scouting Menswear 2023 Competition
Background
Since its initiation in 2012, the Scouting Menswear Competition set out to select the best of the best within a large pool of young menswear design talent. It has raised the profile of emerging menswear designers, introduced them to media and buyers, as well as supported them in breaking through into the retail market.
Today expectations from young designers are high – they are required to produce a comprehensive collection within a few months, be active on social media, have a strong industry and media presence and simultaneously cope with the business of fashion.
The Scouting Menswear Competition assists designers in coping with the demand to establish their brand soon after they have launched.
If you are serious about “the business of fashion” SA Fashion Week will spotlight your talent and give you the marketing platform needed to get to the top of your game.
The Competition
The competition creates a unique platform for young fashion game-changers to grow towards a circular fashion system.
Most important is to understand what the design brief is asking of you and how you can meet the judging criteria.
Do you have what it takes to play a role in fashion?
If your answer is yes, you have to rethink how clothes are made and worn through a lens of circularity. Design a sustainable menswear collection for the ‘now’ fashion lover who values alternative design inspired by dress in street and sport with as much respect for technical innovation as for our people and our planet.
Your customer is confident and curious, with a modern, natural, and independent lifestyle curated from eclectic sources of art, culture, music, travel, food and design.
Your designs must be innovative, original, inspirational and tap into your culture. Make it chic and completely wearable and compostable. Your fabric selection must be luxurious and soft on the skin, considering the local temperatures in South Africa.
The Brief:
From Sport to Street
Design a capsule collection of seven looks,, fusing your inspiration with any sport, and translating it to an
every day luxury trend-setting collection. Use 100% compostable fabrics and components within the collection.
SA chains awaiting AfCFTA clothing and textile rules of origin decisions
Cape Town, W. Cape, SA – South Africa’s chain retailers are waiting – in some cases, apparently, impatiently – for the African Continental Free Trade Area (AfCFTA) to finalise its rules of origin for textiles and clothing ahead of the June deadline set by the AfCFTA Council of Ministers.
“Onshoring is a very strong ambition for retailers for 2 simple reasons,” said National Clothing Retail Federation of SA (NCRF) executive director Michael Lawrence: “The cost of shipping, and quicker response times.
Recently back from a CRALAC conference in Rwanda on the AfCFTA, where the NCRF was “keeping a watching brief”, he said onshoring “should be providing huge opportunities for value chains across the continent, and these are areas that are very good for everyone, but it’s a very technical process these days.”
He said retailers “can’t speak on which rules of origin should be applied”.
“It’s for the production side to tell us how they will operate, and then retail can make decisions, but until that happens, retail can’t make purchasing decisions, regardless of the developmental or commercial opportunities identified.” S&V
Pepkor interim results March 2023
Revenue for the interim period increased by 4.3% to R43.8 billion (2022: R42.0 billion) and gross profit rose 4.4% to R15.5 billion (2022: R14.8 billion). Operating profit went down 8.4% to R5.1 billion (2022: R5.6 billion). Profit attributable to owners of the parent was 10.6% lower to R3 billion (2022: R3.3 billion). Furthermore, headline earnings per share decreased to 80.8 cents per share (2022: 91.5 cents per share).
Dividend
In line with Pepkor’s historical dividend policy, no interim dividend is declared
Company outlook
Trading in April was weak but improved in May 2023. It is, however, not expected that the operating and consumer environment will improve any time soon. Targeted cost reduction measures have been implemented and will continue to compensate for softer trading performance.
High levels of product inflation are expected in the coming summer season based on currency fluctuations. Consumer affordability remains a priority for merchandise teams. Inventory levels remain elevated and will be managed to lower levels over the remainder of the financial year.
Performance in the second half of this financial year will benefit from an additional trading week in the group’s clothing and general merchandise retail brands (53rd week). This is in line with this year’s retail trading calendar. Pepkor’s retail store footprint will exceed 6 000 stores by the end of this financial year, as its robust and proven store formats continue to expand.
Management’s focus remains on ensuring the group’s discount and value offerings meet changing customer needs. Value creation plans have been formulated and are in the process of being executed in the following areas:
*Entrenching the group’s dominant position in key product categories
*Expanding the group’s offering in ladies wear
*Continuing to review the portfolio of businesses and their contribution to value creation
*Growing the group’s presence and reach in the informal retail market in South Africa
*Growing the group’s cellular and financial services offering
*Expanding the group’s proven and very successful discount and value proposition in the Brazilian market
*Reducing costs through efficiencies and leveraging the scale of the group’s operations
Pepkor remains steadfast in its purpose of making a positive difference in the lives of our customers and creating value for all stakeholders, including generating attractive returns for investors.
The Ancient Greeks exercised naked. In fact, this is where our word “gymnasium” comes from; γυμνός (gymnos) means naked in Ancient and Modern Greek.
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