Focus moves to corruption and inefficiencies

Massive investment in port

infrastructure in a number of

ports serving southern Africa

is not resulting in the expected

improvement in productivity

and reduction in costs – due

to a combination of poor

management

and corruption.

“From

Nigeria to

Djibouti,

decrepit and

inefficient

container

ports are being

expanded with

money from the

World Bank,

governments

(particularly

those of China

and Japan) and logistics firms.

That offers the potential to

transform African trade.

“Yet corruption and poor

management may mean the

gains will be squandered,”

says The Economist in a

2016 article headlined “The

Bottleneck”.

Bringing it closer to home,

Sandra Sequeria, assistant

professor in development

economics in the London

School of Economics

Department of

International

Development,

estimated in a

2015 research

study that the

probability of

paying a bribe

was much higher

in Maputo (53%)

compared to 36%

in Durban – and

that the average

amount of the

bribe was also

approximately three times

higher.

This translated into Maputo

being 140% more expensive

that Durban.

She found that corruption

took two forms – collusive

corruption where both parties

benefited from an illicit

deal, such as paying to evade

tax, and coercive bribery

or extortion – which only

benefited the corrupt official.

Port operators are among

the losers. An earlier study

of South African firms by

Sequeria found that a shipper’s

choice of port was driven

primarily by the combination

of transport and corruption

costs.

This is leveraged by the

Walvis Bay Corridor Group,

which is promoting Walvis

Bay as a safe and relatively

corruption-free gateway.

Namibia is ranked by

the latest Transparency

International Corruption

Perceptions Index as the fourth

least corrupt country in Africa.

With a score of 52, it is

ranked 53rd in the world.

South Africa is the sixth

least corrupt, and is ranked

64th.

Of the

other countries

with ports serving the

region Tanzania is ranked

116th, Mozambique 142nd,

Kenya 145th and Angola 164th

in the world.

Governments are

responding due to a

combination of a loss

of customs revenue and

stagnating economies

which are not creating jobs

for increasingly restless

populations.

Mozambique has introduced

a “single window” customs

system since the report by

Sequeria.

All goods being imported or

exported across Mozambican

borders have to have a unique

customs reference number

(UCR).

Clearing agents tell FTW

that this has helped to some

extent, but one of the results

has been that it is becoming

more difficult to deal with

customs.

Namibia,

which has been

steadily improving

its ranking in the corruption

index, has an Anti-Corruption

Commission, which reports to

parliament.

In Kenya President Uhuru

Kenyatta has expressed

frustration that the

government’s anti-corruption

drive is not yielding the desired

results.

Adding to the challenge

in most southern African

countries is corruption on the

roads – with traffic officials

demanding bribes.

Shippers will vote with their

wallets – following the least

corrupt value chain.

INSERT

A shipper's choice

is driven by a

combination of

transport and

corruption costs.

– Sandra Sequeria