Mozambique sets up committee to address trade competitiveness

Mozambique is to establish
a National Trade Facilitation
Committee (NTFC) to ensure
it meets the World Trade
Organisation’s (WTO) Trade
Facilitation Agreement (TFA)
criteria, especially around
the movement, release and
clearance of goods.
The TFA came into force
on February 22 this year
following its ratification by two
thirds of the WTO members,
including Mozambique. “Full
implementation of the TFA has
the potential to globally reduce
trade costs by 14.3% and create
up to US$1 trillion in additional
trade per year,” said Caroline
Ennis, partner at consultation
company, Lahluva Consultores.
Ennis pointed out that many
of the provisions in the TFA
focused on challenges raised by
the logistics industry around
trade barriers in Mozambique.
“These include logistics
costs, pre-shipment inspections
which take too long, lack of
information and a lack of
private sector consultation by
government-run entities,” she
commented.
A recent report by the United
States Aid (USAID) funded
programme, Supporting
the Policy Environment for
Economic Development
(SPEED+), pointed out that
services offered at the KM4
Road Terminal at the Ressano
Garcia border post hampered
Mozambique’s competitiveness.
Co-author of the report,
Erminio Jocitala, said that
while the Mozambique
Development Corridor
(MDC) had been making
progress in relation to other
Southern African Development
Community (SADC)
countries in improving its
competitiveness in terms of the
costs and time taken to import
and export containers, the
corridor also competed with
Durban. And Durban, which
is investing heavily to become
the regional market leader
for container handling, has
24-hour access for transporters.
“For example, the KM4
facility only operates 16 hours
per day compared to the 24/7
operations at South Africa’s
Lebombo Border Dry Port
(KM7) which also offers a huge
parking area compared to the
KM4,” said Jocitala.
He added that peak
operating hours at KM4 could
see trucks waiting between
three and five hours to access
the facility, with clearance
times averaging between 45
minutes and five hours.
“Estimated revenue losses
due to waiting times of an
average 75 minutes can range
between R2 500 and R9 900
per truck per month,” Jocitala
highlighted.
He said the MDC was “vital
to the economic transformation
of Mozambique” as well as to
the economy in the southern
part of the country. “The
corridor is one of the main
import and export routes,
linking the mining production
centres to the industrial
and agricultural regions in
South Africa, extending to
Johannesburg and Pretoria
in the extreme west of the
corridor. The corridor also
serves the provinces of
Limpopo, and Mpumalanga
and Gauteng (to a lesser extent)
in South Africa, as well as
Swaziland and southwest
Mozambique.
“It is therefore extremely
important that the country
finds find new solutions to
overcome capacity restrictions
and ensure the MDC meets
the logistics and management
requirements for the supply
chain,” Jocitala said.
The World Economic Forum
2017 Global Competitiveness
Index ranks Mozambique
133rd out of 138 countries.
INSERT
Challenges
raised by
logistics
industry
• Logistics cost
• Pre-shipment
inspections
• Lack of
private sector
consultation