Battle rages for the future of trade in Zimbabwe
Trading in southern Africa offers many challenges for transport companies, especially in politically unstable countries like Zimbabwe. Since the removal of former President Robert Mugabe, some hope that transporting goods to and from Zimbabwe could become less expensive. FOCUS takes a look.
Despite the difficult year experienced by many South African companies operating in southern Africa during 2017, as a result of political unrest in many neighbouring countries, 2018 promises to be an exciting year, especially since the removal of President Robert Mugabe in Zimbabwe. The country is a top trading destination for many South African transport operators that visit to deliver exports or collect imported goods.
The journey to and from Zimbabwe often results in exorbitant costs and ridiculous delays (see FOCUS issue 12 of 2017 for more information). However, as President Emmerson Mnangagwa undertakes his 100-day plan to boost the recovery of the Zimbabwean economy, it seems that inefficient, expensive border crossings might soon be a thing of the past.
Mnangagwa identified a few issues that his administration will attempt to address within the first 100 days of his inauguration. One of the pressing issues is the rehabilitation of the Beitbridge border post in southern Zimbabwe, which borders South Africa at the Limpopo River.
The Zimbabwe Independent reports that US$ 100 million (R1,2 billion) was awarded to Zimborders in December to rehabilitate the busiest port of entry in Zimbabwe within 100 days.
This border post reportedly recorded around 500 vehicles and 10 000 travellers passing through every day. Travellers are estimated to wait between six and 18 hours to enter, while it can take commercial vehicles up to three days.
Zimborders is set to upgrade the border post with electronic cargo tracking and manifest control systems, mobile scanners, a new bridge, the rehabilitation of weighbridges and improved road networks to and from the bridge.
Zimbabwe Independent quotes Zimbabwean Finance Minister Patrick Chinamasa: “Government acknowledges the need to ease entry and exit of tourists and travellers, improve trade facilitation and revenue-collection efficiency at the Beitbridge port of entry.”
According to the news publication, the border will also be computerised, which the government hopes will strengthen ties between South Africa and Zimbabwe with harmonised customs systems and procedures at the border post.
However, despite the promises of improvements that will drastically reduce costs for South African transport operators, the future of Zimbabwe remains uncertain with whispers of projects being scrapped.
In May 2017, Mugabe launched a US$ 1 billion (R12,3 billion) project to expand the 580-km road between the Beitbridge border post and the capital of Zimbabwe, Harare. The project was awarded to Austrian contractor Geiger International.
It was set to commence three months after the announcement and be completed within three years. However, after nine months, construction on the road has still not started.
The Standard reports that the project could potentially be cancelled if Geiger International does not start construction soon. It reports that, according to government sources, top state actors wish to push for the cancellation of the tender as it is expensive and has taken too long to get started.
While Zimbabwean Transport Minister Jorum Gumbo denies the possible cancellation of the tender, he did note that the project is also on Mnangagwa’s 100-day plan.
The Standard quotes Gumbo: “No one has given anyone an ultimatum, but we have just listed the project as one of the key issues that we are dealing with as a priority in the 100-day plan.”
Interestingly, Zimbabwe is looking mainly outside of the African continent for assistance in rebuilding the country. China, for example, seems to be a top investor.
Matthew Campbell quotes Chinamasa, in his article for Bloomberg, as saying: “We look forward, naturally, to working with China in terms of our development path. They’ve been able to take out of poverty something like 300 million people. That is a feat not many countries have been able to achieve, and that means we have no choice but to look to them for guidance and direction.”
Zimbabwe signed a financial-assistance package with China for US$ 223 million (R2,7 billion), which will be used for upgrading infrastructure, such as the Robert Gabriel Mugabe International Airport (formerly known as Harare International Airport), and construction of a new parliament building.
While international investors see the opportunity for growth in the country and the new administration seems to have the right attitude toward recovering the Zimbabwean economy, Mnangagwa only has seven months to demonstrate his competency before the next Zimbabwean election in August.
However, Campbell points out that Mnangagwa’s democratic credentials are questionable. He writes: “For many Zimbabweans, he’s associated with one of the ugliest episodes of Mugabe’s reign – a 1980s purge that led to the murder of some 20 000 civilians by the new national army. Opposition politicians have accused Mnangagwa, (who was minister of state security at the time) of being deeply involved in this purge.”
These allegations were never confirmed, but it does leave a cloud of uncertainty over Zimbabwe and its future. For the time being, South African transport companies will have to fork out a little extra to continue to do business in Zimbabwe.