by Munetsi Madakufamba This is the second in a second part series on trade
South Africa’s insistence on a 125 percent cash deposit on some goods in transit through its ports has sparked widespread concern amongst its landlocked southern African neighbours who are now exploring other trade routes in the region.
In March this year, South Africa adopted a new system that requires a provisional payment of an amount equal to 125 percent of the duty which would be payable if the goods were imported into South Africa.
The cash deposit, payable in US dollars and refundable within 30 days after producing clearance documents from the exit border post, applies to, among others, textiles, electronic goods, tyres, liquor and cigarettes, transported either by road or rail.
The cash deposit was a central theme at a recent regional business seminar held in Harare on “Current Threats to Regional Trade Cooperation”. The seminar, which drew participants from private sector bodies in the Southern African Development Community (SADC) region, among them, Zimtrade, Zambia Manufacturers’ Association (ZAM) and Botswana Confederation of Commerce and Industry (BCCI), resolved to seek alternative survival means if South Africa refused to budge and scrape the new system.
There are several alternative ports in the region, large enough to cater for large volumes of cargo,” said David Zausmer, Chief Executive of Beira Corridor Group, who urged traders to redirect their transit goods to other routes in the region.
The major alternative trade routes available to most of the landlocked SADC states are: Tanzania-Zambia (Tazara) rail line to port of Dar es Salaam in Tanzania. Beira Corridor, Maputo and Nacala Corridor to ports of Beira, Maputo and Nacala in Mozambique, and port of Walvis Bay in Namibia.
Dar es Salaam is linked by Tazara rail line, stretching over a distance of 1 852km from Kapiri Mposhi in Zambia. With an installed annual capacity of 2.5 million tonnes of general cargo, the port has mainly been catering for Zambia’s oil imports and copper exports as well as Malawi’s agricultural exports.
At present, however, war-ravaged Rwanda and Burundi have the most to gain from the port which is handling large volumes of emergency relief food imported by the UN World Food Programme.
Nacala port, located on the north-east of Mozambique’s northern province of Nampula, would serve as the best option for Malawi. The route is about 800km away from Blantyre and one train per day runs in each direction, which means less congestion.
Further down south, the port of Beira offers Zimbabwe and Zambia the shortest distance to the sea by rail. Beira is about 300km from Machipanda along the Beira Corridor, far shorter than Durban which is over 1 000 kilometres away from Zimbabwe’s border town of Beitbridge.
Alternatively, cargo from or through Zimbabwe could be channelled through the Limpopo railway to the port of Maputo, about 550km from Cikwalakwala on the border with Zimbabwe.
According to Zausmer, the corridors have been upgraded “and we are looking forward to an increased share of available cargo”.
Although the Maputo Development Corridor project is pre-occupied with upgrading infrastructure between South Africa and Mozambique, traders from other countries can still access the port through the Limpopo corridor and thus avoid paying the dreaded cash deposit.
However, some traders still shun the Mozambican routes because of fears entrenched during the two decades of civil war. Morrison Sifelani, Zimtrade Chief Executive, says there is need for businessmen to shake off this old thinking and consider Mozambique especially with the peace that it is enjoying now, and stop looking at South Africa as a traditional trade route.
“I do not see how Durban, several kilometres away from Beitbridge, can still remain a traditional route to any serious businessperson,” echoes Zausmer.
Walvis Bay, Namibia’s only deep-water port returned in 1994 by South Africa after several years of occupation, is now a strategic gate for the emerging markets of southern Africa.
The bay is linked to other SADC countries by Trans-Kalahari and Trans-Caprivi highways which were upgraded last year, as well as a 640km rail line that ends at Grootfontein near the border with Botswana. Mutonga, a trade attaché with the Namibian High Commission, says hauliers have to use road transport for further dispatch from Grootfontein to find a connecting rail line in neighbouring Botswana.
The port of Walvis Bay, rated in 1994 as the world’s ninth most efficient harbour and with its reduced trade tariffs announced in the same year as an investment incentive, has a distinct advantage over other ports along the Atlantic coast line.
Namibian businessmen have however, voiced concern over the Maputo Project saying it will smother efforts to develop the Walvis Bay harbour. Speaking at the World Economic Forum in Cape Town recently, the Namibians argued that the project should have been a regional one, and not between Mozambique and South Africa, to foster efforts toward regional integration and enhance chances of upgrading similar routes.
Apparently for all the interior SADC member states, the alternative trade routes are closer to the sea than the South African options and in that case, redirecting their cargo would actually be a saving in terms of time and probably cost. (SARDC)
