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When tech and bureaucracy collide

There's now a wait of 120 days before a distributor can bring ICT goods into the country. (123RF)
Vendors and distributors say they’re being hamstrung by South Africa’s standards regulator, which is taking too long to approve products for sale.

 

The National Regulator for Compulsory Standards (NRCS) of South Africa was established in 2009 to administer compulsory specifications. Its aim is to protect the South African consumer and the country’s environment from harmful and non-compliant products. It also aims to promote fair trade.

The NRCS issues what are known as LOAs – Letters of Authority – to those wishing to import, build or distribute products in South Africa. It certifies a vast array of goods; from frozen prawns to paraffin stoves, motorcycle helmets to vehicles, and of course, much of the ‘electro-technical’ hardware that the channel relies on to make its living, such as laptops, monitors, servers and printers. It’s worth noting Icasa handles the approvals of smartphones.

Vendors and distributors say in some cases, by the time the LOA is granted the product is no longer being manufactured and sometimes approvals can take well over a year.

The Margin spoke to the NRCS CEO Asogen Moodley earlier this year about the backlog. He stoutly defended the work the NRCS was doing, saying the delays were comparable to other countries. He also said they were protecting the consumer, and he wouldn’t compromise this, even though some products were being delayed.

Moodley has now resigned from the NRCS, and has been replaced by Edward Mamadise in an acting capacity. Desperate companies have turned to the American Chamber of Commerce (Amcham) in South Africa, which formed an ICT stakeholder forum to address the issue.

Carol O'Brien, Amcham executive director, told the Margin the situation had now worsened, with delays for LOAs typically stretching to 200 and 300 days. In the very worst cases, some companies have been waiting for between 400 to 500 days.

“The question was asked of (minister of trade and industry) Rob Davies in early October when the backlog was going to be cleared in. His response was that they will meet the three month deadline for clearing the backlog,” said O'Brien. The deadline was November 14, ‘which has come and gone and the situation has not improved, at all, in any shape or form’.

Claire Vyvyan, Dell’s vice president of enterprise solutions group for Europe, Middle East and Africa, told the Margin earlier this year they are ‘incredibly frustrated as a company’ by the delays. “We want to bring bleeding edge technology into this country. That [LOA] process, not just for us, but for the whole of the technology sector, is inhibiting the speed at which we can bring new technology into the marketplace. These technologies are absolutely critical to business enablement.

“The way the government does this is a challenge for the sector, and it’s not doing the country any favours. This technology is being deployed all over the world, other governments are adopting it, almost on the day of launch, and it’s taking us tons of effort and tons of time [to get it into South Africa],” says Vyvyan.

She adds the delays were not unique to Dell, but a ‘general problem’ in the market. “This is a regulatory clearance process that we do with every country in the world, and it works very smoothly. South Africa is the worst country in the world to clear new  technology. So you’re putting your [South African] businesses at a disadvantage. There’s parts of government that need access to that technology too, and don’t need to be buying technology that’s 12 months out of date.”

How bad is the situation?

According to Schalk Burger, general manager of imports at Pinnacle Technology Holdings, using the NRCS’ own figures for 2014/2015, there had been 11 282 electro-technical applications received and carried over from the previous year. He says the figure stood at 17 977 for 2015/2016. “They [NRCS] only say they’re going to be able to process 8 400 [LOAs per year]. So what they’re going to carry over is 9 500 applications, which puts us back two years.”

When the NRCS was formed, an LOA could be obtained in about 10 days, say distributors, and this gradually increased to about two weeks. Come 2014, the wait time increased to 120 days, and there’s now talk this could be increased to 250 days. A key part of the problem seems to be that there are now an increased number of applications for LOAs. There however does appear to be a positive development, with the NRCS mulling over a ‘risk-based system’ to speed up the issuing LOAs. This, broadly, involves a company taking responsibility for the safety of its products, in exchange for the speedy issuance of an LOA.

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