Economist reveals startling findings of excessive intra-Africa transport costs

Transport costs severely inhibit trade between the SADC states, and according to Namibian economist Klaus Schade, it costs as much to move goods between African states as it costs to move goods from Asia to Africa. Acting director of the Namibian Economic Policy Research Unit (Nepru), Schade recently examined intra-trade opportunities in the Southern African Development Community (SADC) after the area’s free trade agreement (FTA) got up and running in August last year. The SADC comprises 15 states – Angola, Botswana, the Democratic Republic of Congo, Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Seychelles, SA, Swaziland, United Republic of Tanzania, Zambia and Zimbabwe. “The cost of moving a container from Tanzania to Uganda or Rwanda is the same as that of transporting a container from China to Tanzania because of the high transport costs,” he added While the opening of the FTA meant that goods entering any part of SADC from within the region would attract zero import duties, he warned of other hurdles that still exist on the path to regional integration and increased trade among SADC countries. “It was a good start but reducing tariffs is just one aspect of regional integration,” Schade told the Namibian Inter -Press Service. He added that, for the SADC FTA to achieve its objective, non-tariff barriers need to be removed – including the cumbersome customs procedures, lack of transport infrastructure, and delays at border crossing points. “If these issues are not addressed we won’t see strong growth in intra-regional trade,” he said – adding that working towards common customs documents while harmonising other systems may also assist in the regional integration objectives. Barney Curtis, executive officer of the Federation of East and Southern African Road Transport Associations (Fesarta), agreed with Schade on the non-tariff barriers he cited – but suggested that his cost comparison was not indicative of the entire southern subcontinent. “If he’s looking at transport to Uganda, he’s obviously talking about the Northern Corridor, linking Mombasa, through Kenya to Uganda, Rwanda and Burundi,” he told FTW. “But that’s well-known as the most expensive transport region in the southern sub-continent, with road freight prices twice as high as those between Durban and Lusaka in Zambia, for example.” He also indicated that Kenya, Uganda, Rwanda and Burundi were not members of the SADC, but rather of the 19-member Common Market for Eastern and Southern African (Comesa) And action is currently being planned to help cure the excessive rates in this corridor, Curtis added. The longest existing corridor management in southern Africa, the Northern Corridor Transit Treaty Authority (NCTTA), is busy trying to resolve the problem. “It has been there for some years now,” said Curtis. “But, while it was originally a government body, private sector members are now being accepted, and it will probably become more effective.”