What Chance Regional Integration?

February 1, 2018
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The cross-border road-transport industry throughout the Southern African Development Community (SADC) region operates in a permanent climate of frustration at the continual obstacles to interstate trade, that are raised by authorities.

For potential manufacturers, miners and farmers in southern Africa, being globally competitive requires high levels of efficiency. This is difficult to achieve at low volumes and with constraints imposed by limited availability of skills and excessive government regulation.

European Union (EU) Chief of Development Aid, Stefano Manservisi, says: “This region is steadily losing its lead on other regions, not only in gross domestic product, but also in unemployment and other structural inequalities.”

The result is low and reducing levels of company tax revenue and a focus on other revenue sources, including the import-export trade.

Fesarta has calculated that approximately 30 percent of the US$ 10 400 (R147 374) cost of moving a container on the North South Corridor, from Durban to the Democratic Republic of Congo, is a result of various forms of taxation.

A further 25 percent is due to delays caused by border and corridor control activities. The queues of commercial freight vehicles at the Port of Durban and at borders and checkpoints amount to a collective wastage of up to US$ 800 000 (R11 336 520) per day.

Manservisi notes: “While SADC has a free-trade agreement on paper, the region still faces major impediments to greater actual free trade and regional integration. Examples of this include the unilateral restrictions Zimbabwe has slapped on South African exports and, more generally, bureaucratic blockages and corruption at border posts.”

A recent meeting between the two revenue authorities discussed “various concerns” raised by South African stakeholders surrounding the ever-mounting cost of doing business through the border post.

“The discussion further acknowledged the importance of other critical value-chain players from both countries,” says Sandile Memela, South African Revenue Service (SARS) spokesperson.

Transporters are, however, questioning just how “valuable” SARS deems their advice… “We were told there was a meeting the next day … and that we were not invited,” says a transport representative based at the border. The official exclusion of the trucking industry from strategic planning discussions appears to be designed to mask the vested interests of border officials.

It is essential that SADC follows the lead given by the East African Community (EAC) and their donor partners. The Corridor Authorities, including the private sector and the donors, use independent consultants to monitor the efficiency of the transformation of their 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 the EU and other donors to increase their efforts and contributions.

Mike Fitzmaurice is the CEO of the Federation of East and Southern Africa Road Transport Associations (Fesarta). He has 42 years of experience in the transport and logistics industry with several major companies in South Africa, as well as overseas exposure with some of the leading transport companies in six European countries. Since 2004 he has established and run Transport Logistics Consultants. In May 2015 he became CEO of Fesarta.

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