Thu 10 Dec 2009

 

Business Daily: Sub-Saharan Africa has launched a One-Stop Border post (OSBP) between Zambia and Zimbabwe in a pilot project aimed at eliminating the tedious customs and immigration clearance procedures hurting the region’s commerce.Architects of the Chirundu OSBP-a tripartite task force made up of three regional economic blocs in Africa- say the project will be replicated at all the border posts separating member states to ease intra-regional trade as the process of economic integration gains momentum.“Years of cross border trade experience around the world, not just in Africa have also shown that the costs of doing business are invariably distorted where the efficiency of supply chains, both in exports and imports, is thwarted by poor facilitation at the border points,” Mr. Juma Mwapachu, the EAC secretary general who chairs the task force said in a speech. In a symbolic gesture to show the importance that the project has gained in the on-0going talks to merge the EAC, COMESA and SADC, Zambia’s President Rupiah Banda and his Zimbabwe counterpart Robert Mugabe attended the launch of the Chirundu border post-the first OSBP to ever open in Africa.The idea of an OSBP was first mooted in May 2005 at the COMESA Council of Ministers meeting in Kigali, Rwanda in reaction to rising complaints by the private sector over the official hurdles that they have to encounter in the course of trade.The project has since been taken over by the tripartite team that is working on the merger of the three regional blocs that control close to 58 per cent of combined African nations’ wealth.Chief executives of the regional blocs who are driving the project have been tasked by members to source for funds from the development partners to introduce the OSBP model throughout the region.According to Mr. Mwapachu, the Chirundu project is part of the $2.5 billion North-South OSBP that the region expects to complete in the next few months.The development partners, among them DFID, JICA, EU, World Bank, ADB, and Development Bank of Southern Africa and the North-South Corridor, have already pledged $1.2 billion for project while the remaining $1.5 billion will be raised by the Development of South Africa.Exporters say it is easier for goods to move between Africa and Asia, US or Europe than from one African country to the neighboring one. Inefficiency and corruption at border points is blamed for low intra regional trade, currently estimated at less than seven per cent.Even within the EAC states which started integrating their economies ten years ago, the intra-regional commerce remains low at between 5-7 per cent according to EAC Secretariat’s figures.Experts say efficiency at border points can positively change Africa’s attractiveness for foreign direct investment that economists say is badly needed to spur a continent wide economic takeoff.“As at now, Africa still remains a continent which produces largely what it does not need and consumes what it does not produce,” says Ms Beatrice Kiraso, an EAC deputy general in charge of political affairs.A recent study by the World Bank shows that only 25 per cent of the supply chain’s high costs are attributable to poor physical infrastructure, as 75 per cent of the distortion is contributed by cumbersome customs procedures, bureaucratic behavior and corruption. The opening of the Chirundu OSBP comes just months before the EAC, COMESA and SADC heads of State meeting in May next year to agree on a free trade area protocol that is expected to boost intra-regional trade on the continent. Chirundu is one of the busiest border points in Africa, being the main entry point for commercial traffic entering Zambia from South Africa and other commercial ports to the south as well as those proceeding through to central and Eastern Africa to the north. Statistics posted on the internet by the Zambian commerce ministry indicate that on a typical day, Chirundu handles an average of 270 trucks, making it the busiest port in Zambia and one of the most utilized inland border points in the Eastern and South African region.Yet according the to the first draft report prepared for the task force by Transport Logistics Consultants-the Chirundu OSBP project advisors- customs authorities of the two countries accounted for more than sixty per cent of the total border transit time at Chirundu.Zambia Revenue Authority on its own accounted for more than half the border time for north bound traffic and more than a third of the time for south bound traffic.“Traffic could be delayed for long periods as transporters awaited payment of duties and this affected northbound traffic, in particular consolidated loads, containerized and sometimes break bulk loads,” says the consultant’s report that gave impetus for the implementation of the OSBP project.According to EAC calculations, it takes two to three days for a haulage truck to cross the Chirundu border point without the OSBP model. If you consider that Chirundu handles an average of 268 trucks a day, this translates to a traffic volume of 96840 trucks per annum, as a minimum,’’ says Mr. Mwapachu.It currently costs each truck $140 per day in fixed costs and drivers time meaning for three days, the cost per truck is $420.This is the cost that is saved by the OSBP model in which it is estimated each truck should not take more than two hours to cross and only 15 minutes for fast track pre-cleared traffic.“In our estimation, the potential cost saving per annum is about $486 million which accrues to our economies and leverages competitiveness,’’ says the EAC team.