What Chance Regional Integration?

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Tuesday, 7th November 2017

The cross-border road transport industry throughout the SADC region operates in a permanent climate of frustration at the continual obstacles to interstate trade, that are raised by authorities. 

Institute for Strategic Studies’ (ISS) Peter Fabricius notes that “Southern Africa is economically Africa's most advanced region – but its collective economy is stagnating”, and EU Chief of Development Aid, Stefano Manservisi, says that ‘this region is steadily losing its lead on other regions, not only in GDP but also in unemployment and other structural inequalities”.

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The impediments can be ascribed to political interference, ideological objectives, and the excessive cost of governments with socialist, centralist perceptions of revenue acquisition, and populist and nefarious redistribution policies. The impact on industry from taxation in all forms, coupled to exposure to competition from manufacturing in China, India and other more advanced regions has been restriction of investment. For potential manufacturers, miners, and farmers in Southern Africa, global competition requires high levels of efficiency which are difficult to achieve at low volumes, and with constraints imposed by limited skills availability and excessive government regulation. The result is low and reducing levels of company tax revenue and a focus on other revenue sources, including the import-export trade.

Federation of East and Southern African Road Transport Associations (FESARTA) has calculated that approximately 30% of the $10,400 cost of moving a container on the North South Corridor from Durban to DRC, is due to various forms of taxation; a further 25% is due to delays caused by border and corridor control activities. The queues of commercial freight vehicles at the port of Durban and borders and checkpoints amount to a collective wastage of about $ 700,000 - $800,000 per day ($225 million p.a.)

As noted by Manservisi “while SADC has a free trade agreement on paper, the region still faces major impediments to greater actual free trade and regional integration. The unilateral restrictions Zimbabwe has slapped on South African exports and, more generally, bureaucratic blockages and corruption at border posts are examples”. The latest Zimbabwe regulations on seals and required TIP (Temporary Import Permits) forms is just further aggravation.

 

The official exclusion of the trucking industry from strategic planning discussions appears to be designed to mask the vested interests of border officials.  FTW reports that there was a recent meeting between the two revenue authorities to discuss “various concerns” raised by SA stakeholders about the ever-mounting cost of doing business through the border post.  He (Memela; SARS) said the discussion centred around operationalising a one-stop border post (OSBP) between SARS and ZIMRA, concerns that traders and transporters were moving their business to other ports of entry, as well as initiatives to protect local industries, including clothing and textiles. “The discussion further acknowledged the importance of other critical value chain players from both countries,” said Memela. But transporters are questioning just how “valuable” SARS deems their advice...........We were told there was a meeting the next day…………but were told that we were not invited,” said a transport representative based at the border.

 

From the FESARTA perspective, it is essential that SADC follows the lead given by EAC and their donor partners, which has successfully implemented 10 OSBPs, reduced vehicle delays to under 2 hours, standardised charges, and made significant inroads on corruption. The Corridor Authorities include the private sector and the donors use independent consultants to monitor the efficiency of the transformation of the borders and the corridors.

Until SADC can give undertakings that their Member States are willing to commit to real “regional integration” and promotion of business and trade efficiency, instead of “developmental states” managed by inept politicians, it is futile for EU and other donors to increase their efforts and contributions.

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