Traders into Africa must factor in high travel costs

‘Do your deskwork before swanning around the continent’ Alan Peat REALISE THAT doing business in Africa is going to cost you, and get your deskwork done in your home office before you go rather than swanning around the continent unprepared. That was the immediate response from trade consultant, Duncan Bonnett of Whitehouse & Associates, to assertions that regional co-operation and integration are being badly hindered by all sorts of extraneous costs in travelling around Africa in an attempt to do business. He warns businessmen to assess the charges they face. Hotel costs in US dollars (and at about US$200 a night); “villainous” telephone costs of some US$6 a minute for local calls from hotels in Tanzania; departure taxes from all airports (of about US$20) PLUS Malawi having an additional “airport tax”; and 10% hotel levies and 10% government levies on your hotel bills. “But people should realise this beforehand,” Bonnett told FTW, “and plan their trips.” It’s much cheaper and more cost-effective to do your deskwork before you go, Bonnett added. “Make sure you’ve got interested people at the other end, prepared to do business with you. Arrange all your appointments before you leave, for example. Don’t try to do it by telephone from the Hilton in Dar es Salaam. “You’ve got to be African street-smart.” If you could eliminate all these inter-regional costs, it would certainly improve matters, Bonnett added. But there are two deterrents to this happening, he told FTW. First is that all these “bonds” and “fees” are not imposed by African states to cover the cost of whatever service is offered - they are “revenue generators”, according to Bonnett. The other problem here is the fact that African trade - from an SA perspective - is export trade, and virtually no counter trade. “If African countries drop all these irritating little barriers, just to increase SA’s exports into Africa, you’ll meet with a lot of objections,” said Bonnett. “And, if they are losing millions every year if they drop these ‘fees’, they’ll insist that something has to replace this lost revenue.” Anyway, if you get your business cost ducks in a row, Bonnett concluded, you won’t do too badly. “SA exporters are doing just fine in the region, thank you, with exports into Africa growing at about 25% a year. “So all these barriers - while irritating - are not preventing SA companies from doing well there.” ‘Travel costs impede regional trade growth’ A letter from a Namibian trader ADH Leishman, in Business Day last week, complained that travel costs were hindering regional trade. He highlighted a R2 000 business visa fee for Tanzania; a non-returnable private car bond of between R2 000 and R4 000 for transiting Zambia to Kenya (and paid again if you return the same route); and then other fees in Kenya of R4 000-R6 000 for the car, plus visa costs. This, Leishman added, in countries which are members of the Common Market for Eastern and Southern Africa, the Southern African Development Community, and/or the East African Community. These added costs were barriers, he said, and showed “disregard for the goals of unimpeded movement and encouragement of trade and tourism in the regional blocs”.