While the Southern African Development Community (SADC) has moved towards liberalising trade to make the flow of goods between countries easier and economically more rewarding, non-tariff barriers continue to be a concern, a recent study found.
Gregory Mthembu-Slater, an independent economist and political analyst based in Cape Town, was recently commissioned by the South African Institute for International Affairs (SAIIA) to look at how non-tariff trade barriers affect South Africa and Zimbabwe.
SAIIA is a research organisation attached to the University of the Witwatersrand in Johannesburg.
Between one-quarter and one-third of total domestic revenue in sub-Saharan Africa has come from trade tariffs, Mthembu-Slater says. In richer countries, governments get less than 2% of their revenue from such tariffs.
With liberalisation has come the scrapping of these taxes, resulting in revenue being lost. Governments in the region try to recoup these losses by imposing other, non-tariff barriers.
In his paper, Mthembu-Slater writes that “although specific sectors of national economies can, and do, benefit from non-tariff barriers, economies as a whole end up suffering as other countries also impose non-tariff barriers, which pushes up the costs for everyone”.
He focused on the impact of non-tariff barriers on goods passing through the port city of Durban from Zimbabwe via the Beitbridge border post. This crossing is one of the busiest in Africa and certainly the busiest in the SADC region.
Non-tariff barriers
In his research, he identified a number of non-tariff barriers that cause huge losses and major delays.
According to data gathered between September 2005 and June 2006 by the Federation for East and Southern African Road Transport Associations (Fesarta), it took between 63 and 83 hours for heavy commercial vehicles seeking multiple entry permission to cross Beitbridge on the northbound route from South Africa to Zimbabwe.
In December 2005, a “record” high 125 hours were recorded. Application for single-entry permission can take between 48 and 53 hours on the northbound route. On the southbound route, single-entry permission can take between 23 and 44 hours.
It took 26,2 hours for a truck seeking multiple-entry permission on the southbound route to be processed by the South African Revenue Service. Add another 28,5 hours for permission from the Zimbabwe Revenue Authority and another 6,4 hours for clearing agents to do their job.
Mthembu-Slater commends the initiative by Fesarta to keep the border open around the clock, seven days a week. Figures indicate that about 6,8% of northbound and 24,2% of southbound trucks cross between 10pm and 7am.
Many countries in the SADC region are looking at ways to install pre-clearance facilities, which would lead to a decrease in congestion at the borders. They also want to simplify customs documentation.
“For this to work well, the different countries in the region need computer software that can talk to each other. But unfortunately the countries have incompatible excise and customs software,” Mthembu-Slater points out.
The many problems encountered at Beitbridge have led truck drivers on the routes between South Africa, Zambia and the Democratic Republic of the Congo to prefer the Botswana route.
While the Grobler’s Bridge option on the border between South Africa and Botswana is less direct than the Beitbridge crossing, the costs are lower. The route via Zimbabwe involves a chronic diesel shortage and a range of administrative non-tariff barriers, including prohibitive taxes and other penalty charges.
Vehicles on the southbound route have no choice but to use Beitbridge.
Port congestion
Another non-tariff barrier identified by Mthembu-Slater is serious ship and truck congestion at the Durban port, which finds it difficult to deal with an increase in import and export activities. Ship queues waiting to enter the terminal are between 10km and 15km long. This means delays of several hours.
There is insufficient space for trucks in the port and a shortage of equipment to load trucks. Truck queues can cause delays of between three and six hours, translating into a cost of $46 per hour per truck. Trucks often wait in queues of up to 5km long.
Another debilitating problem is the lack of an efficient regional transport network, says Mthembu-Slater.
“Huge amounts of goods that should be transported by rail are now going by road. This is expensive and is bad for the roads, the environment and the economy. Minerals, which are high-bulk items, are an example of goods that should be transported by rail.
“But because of many different factors, minerals are transported by road. This is slow and expensive and does damage to the roads.”
He emphasises in his study that while his focus is on Beitbridge, the problems experienced are not unique to the Zimbabwe-South Africa transport links. These challenges affect the whole region. It is clear that SADC faces an uphill battle to solve these problems. — IPS