Delays stifle regional trade

Research by the bank’s chief economist and vice presi­dent, Professor Mthuli Ncube, and published by the South African media yesterday said the duplication of customs, immigration, police, agriculture and health for­malities was costing traders millions of dollars.
“The multiplicity of those agencies operating on both sides of the same border doubles the bureaucracy . . . ,  which translates into congestion and delays,” he said.
“The cumbersome procedures in customs processing can cost a consignment about US$185 for each day of delay.”

Prof Ncube said the delays, sometimes as long as three days, were opening the floodgates to corruption, which pushed up the cost of trade.
“For instance, traders (or) trucks have to wait about 36 hours at the SA-Zimbabwe border post (Beitbridge). In Southern Africa, customs delays cost the region about US$48 million per year,” Prof Ncube said.
Recent studies have shown that 25 percent of border delays are caused by infrastructure and 75 percent by poor trade facilitation.

The World Bank estimates that intra-Africa trade could double intra-regional trade by easing non-tariff barriers, including customs procedures and poor trans­port infrastructure, helping boost economic growth.
A trade expert, Mr Gift Mugano, said in an interview yesterday “simplification and harmonisation” of proce­dures can eradicate the problem.
He said the delays and bureaucratic approach to trade make African transport, on average, three times more expensive than South American transport and five times

more expensive than Asian transport.

“This definitely affects the competitiveness of African goods on the international markets,” said Mr Mugano, a PhD student in economics at Nelson Mandela Metro­politan University in South Africa. 
“This obviously affects the competitiveness of our exports and hampers intra-regional trade as our own products are constantly being displaced out of the market by interna­tional products from Asia, Europe and other Western countries.

“This is evidenced by low intra-Comesa trade of about US$15 billion. Comesa has a population of more than 400 million people with an estimated Gross Domestic Product of US$300 billion which presents huge market opportunities and great scope for trade.”
Mr Mugano said although there were a number of fac­tors constraining regional trade, such as lack of comple­mentarities of exports, where nations are concentrating on trade of similar products and mostly primary in nature, trade facilitation is a major constraint as well.

He said lessons could be drawn from the Chirundu One-Stop Border Post.
Before the establishment of the OSBP, an average of 321 vehicles was processed through the border per day with a daily average of 268 commercial trucks, 45 private vehicles and eight passenger coaches.
It also took up to five days for a commercial truck to be cleared while passenger coaches took about two hours.

Now, the average vehicles processed per day is between 300 and 400.
“The streamlining and harmonisation of border proce­dures at Chirundu has resulted in the significant reduc­tion of processing times,” said Mr Mugano.
“The clearance times for buses have been reduced by half while private vehicles now take 20 to 30 minutes compared to the previous one hour.”