One-stop shop at borders speeds up trade
Business Day - May 7th 2012, 08:31
A ground-breaking one-stop border post (OSBP) at Chirundu between Zambia and Zimbabwe has demonstrated how the cost of trading in Southern Africa can be substantially reduced by streamlining border procedures.
At present delays at border posts in the Southern African Development Community (SADC) cost traders millions, with Shoprite Checkers complaining recently that it had to complete 16 000 documents in order for the group to send supplies to its African footprint.
An African Development Bank study also finds that the delays at border posts provided significant opportunities for fraud and corruption to flourish.
Streamlined procedures and reduced waiting times would help to eliminate this.
African Development Bank chief economist and vice-president Mthuli Ncube, in a study of factors negatively affecting intra-regional trade, says in S outhern Africa, the one-stop arrangement or joint border control was first introduced at the Chirundu border, between Zambia and Zimbabwe, to simplify and harmonis e cross-border procedures and significantly reduce the cost of trading across borders.
Prof Ncube says Chirundu is a key gateway to Central and East Africa and handled high volumes of commercial traffic, with an average of 268 trucks a day.
"This led in the past to heavy congestion, delays at border posts and related corruption activities, and hence increased costs of trading. The bottlenecks faced by traders at Chirundu and other border posts motivated the Common Market for Eastern and Southern Africa to introduce one-stop border posts in the region, with Chirundu being a pilot," he says.
At Chirundu trucks and traders are checked only once — northbound on the Zambian side and southbound on the Zimbabwean side. "A recent evaluation of the Chirundu OSBP has highlighted many benefits of the new facility, including the reduced supply chain transaction costs, increased government revenues, reduced duplication of efforts, reduced retail price of consumer goods, and promoted investment and growth.
"The time taken by a truck to cross the border has been reduced from two to three days to just two hours, and the fast-track pre-clearance process takes only 15 minutes. Further, the reduced transaction costs (both in fixed costs and truck driver’s time), have translated into increased volume of goods traded across the border, which has significantly increased (by 30%) revenue for the government of Zambia," Prof Ncube says.
His paper says there is an urgent need for a similar one-stop border post between SA and Zimbabwe at Beitbridge. "In Southern Africa, developing OSBPs will not only facilitate and improve trade within the region, it will also address the special needs of countries such as Zimbabwe, which lack maritime access, and consequently suffer high transit cost for their traded goods. The long distances from markets, the heavy reliance on the seaports of SA and Mozambique for exports, together with the bottlenecks at border posts, significantly constrain Zimbabwe’s trade, reduce its competitiveness both in the region and globally, and hamper its socioeconomic advancement."
He explains that the Beitbridge border post is one of the busiest in SADC, with significant volume of trucks and passenger vehicles going from or to SA and other countries up north — Zimbabwe, Zambia, the Democratic Republic of Congo, Malawi, and, to a lesser extent, Tanzania and Sudan.
"The volume of traffic can average more than 12000 travellers and 3500 vehicles a day during the festive season. The delays, high congestion and inefficient service delivery experienced on the Beitbridge border are very costly in terms of waiting time (ranging between 33 to 45 hours) and transaction costs (ranging from $29, 3m to $35m a year). Those costs are limiting the prospects for intra-regional trade expansion.
"Improving the operational effectiveness of the border post, and henceforth reducing clearance waiting times and transaction costs, through the establishment and effective implementation of a one-stop border post is imperative.
"As a result of establishing and implementing the Beitbridge OSBP, the flow of commercial goods and services and the movement of persons will significantly improve, and the environment for private businesses and foreign investment will be more conducive," Prof Ncube says.
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