‘Industry guilty of aiding and abetting climate of corruption’

Overbearing bureaucracy, bribery
and corruption are endemic
across the continent.
In Africa, it may be said, greed rules.
But the equally sad part is that the guilt
doesn’t lie exclusively with one side,
as with government-appointed officials
and bureaucrats. Instead, many shipping
lines and transport companies and their
respective agents are equally responsible
by aiding and abetting the practice when
they willingly go along and pay bribes
that are passed off as a cost of doing
business.
“It’s either that or our ships wait
outside a bit longer,” and “if we don’t
play the game then ways are found to
further delay clearing the cargo,” are just
two of the reasons heard in the course of
preparing this article.
If this sounds like a piece of
journalistic exaggeration, consider recent
reports that described a strike by clearing
and forwarding agents in Nigeria’s Tin
Can Island that resulted not simply from
bribes being taken, but because Nigerian
customs officials had become greedy
and were unilaterally doubling the
amounts they were demanding.
The fact that something above and
outside the official tariff book rate had
to be paid was never an issue – the
Nigerian clearing and forwarding
industry and their clients, the shippers,
are by now well used to this and play
the game as a matter of course – another
‘cost of doing business’ that is simply
factored into the landed price. What the
C&F agents finally took umbrage over
was the barefaced greed of officials.
In another recent case an editorial
in a Tanzanian newspaper welcomed
the news of the overturning of a
monopoly at the port of Dar es Salaam,
saying it believed this would bring
about improvements in efficiency.
The editorial added that it hoped the
authorities would now turn to fighting
graft and corruption within the country’s
transport chain.
‘Infrastructure not the cure-all for
regional competitiveness’
A lot of emphasis has rightly
been placed on improving Africa’s
infrastructure in its ports and railways.
But it’s also been said that infrastructure
is not the cure all for regional trade and
competitiveness, and that governments
play a crucial role and can undo any
vision of a successful and competitive
sub-continent through unsupportive
policies and poor governance.
Nevertheless, infrastructure, or its
lack, remains an equally vital cog in
ensuring that ports, railways, and road
networks along with other transport
systems are able to operate with
efficiency, especially across the wider
integrated regional partnership of
African trading nations.
A report entitled ‘Africa and the
World Economy – the National,
Regional and International Challenges’
presented by the Dutch research centre
Fondad, points out that it costs the
same to clear a 20-ft container through
the port of Dakar as it does to ship the
same container from Dakar to a north
European port. The same report said that
every day spent in customs added 0.8%
to the cost of goods and that Africa had
the longest delays in the world, with an
average of 12.1 days across sub-Saharan
Africa. For some ports those delays can
amount to 30 days or more.
“Excessive bureaucracy, high
insurance costs, cumbersome customs
procedures and outright corruption by
public servants using bribes, official and
unofficial checkpoints escalate transport
costs in Africa,” the report stated.
According to Greg Mills, strategic
adviser to the Rwandan presidency
and head of Johannesburg’s Brenthurst
Foundation, in Rwanda about 45% of
the country’s export value comprises
transport and insurance costs, compared
with an average of 14% for other
landlocked countries.
Bureaucracy the root cause of high
costs and delays
Mills said that throughout Africa the
lack of 24 hour border operations added
to the costly delays but the root cause
of delays and high costs in Africa was
not the shortcomings of regional routes
but unwieldy bureaucracy, government policies and the simple economics of
business.
But Africa is of course not all doom
and gloom. In recent years the continent
has been facing up to its logistical
challenges and has taken impressive
steps to redress its infrastructural
shortcomings. The sheer magnitude of
infrastructural spending that is going on
throughout the continent and especially
in its harbours has begun to transform
ports on Atlantic and Indian Ocean
seaboards, although it remains a slow
process. Probably at no time in Africa’s
history has so much investment been
made in upgrading port and terminal
facilities.
Yet difficulties remain. The World
Bank pointed out in a paper that West
Africa had 24 significant ports stretching
between Mauritania and Angola, many
of them placed in areas that are difficult
to dredge to the requirements of modern
deep-draught ships, while others like
the Lagos ports are limited by their
proximity to urban areas, rendering
them unsuited to the needs of modern
shipping. The document stated that a
single modern four or six-berth port
operating to the efficiency of a Far
Eastern port would have the capacity
to handle all of the region’s container
traffic and suggested that the hub system
might provide a logical solution.
The other challenge facing the
continent is that most of Africa’s ports
are poorly equipped to take advantage
of the multi-modal aspect of containers,
lacking the integrated rail and road links
with their hinterlands and neighbouring
landlocked neighbours. This is amplified
in the long dwell times experienced at
many African ports, which increases the
amount of congestion around the ports.
Mills reported that it took a minimum
of 72 hours to clear a container in
Mombasa, whereas in Singapore it took
a little over two minutes.
Port systems have failed to keep
pace with trade surge
With a few exceptions most sub-
Saharan African port systems have been
slow in keeping up with the surge in
international trade and its regulatory
and technological aspects, leaving the
sub-continent to lag behind other world
regions. Many of the region’s ports have
exceeded their design capacity and most
lack the supportive logistical systems of
efficient rail and road networks. Even
South Africa has begun to lag in this
respect. Pressure from international
container operators has seen a crash
course in upgrading and improving
infrastructure, but institutional and
regulatory reform remains slow across
most regions.
A number of African countries turned
to privatisation as a panacea for all their
logistical problems, but while there
has been some success in the operation
of ports, terminals and railways, the
challenges of Africa are proving too
great for many international operators,
leading to a growing dissatisfaction with
privatisation and a move by respective
governments to take back the terminals
and railway networks. Already a number
of concessions have been cancelled or
reworked.
As with other parts of the world the
current economic downturn is to Africa’s
advantage, creating breathing space in
which port and land transport reforms
can be introduced and completed,
although there is always the inherent
danger that with the pressure relieved
some of these projects may be relegated
to the back burner.