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Experts call for Kazungula-style strategy as Beitbridge expands

by Staff reporter
10 May 2021 at 05:30hrs | Views
COMPANIES must utilise inland clearing facilities to reduce congestion as Beitbridge Border Post enters a US$70 million expansion programme this year to avoid congestion, trade experts said yesterday.

Gridlocks in the flow of cargo through Africa's busiest land port could affect revenue collection in Zimbabwe as trade slows, the experts noted.

They spoke as the African Export-Import Bank (Afreximbank) authorised a US$43 million senior-term loan facility to Zimborders Mauritius (Pvt) Ltd and issued a US$27 million investment guarantee to another fund for the project.

Economist Victor Bhoroma said the project would delay the flow of raw materials as congestion kicked in, affecting Zimbabwe's manufacturing sector.

"This will undoubtedly impact the North-South trade transit corridor where several countries in the Sadc region rely on the border post for trade with South Africa," Bhoroma told NewsDay Business.

"South Africa is Zimbabwe's biggest trading partner accounting for 55% of Zimbabwe's imports and exports. The border post handles cargo worth at least US$10 million per day between the two countries. It also handles scores of travellers and smallscale merchandise which supports cross-border jobs in Zimbabwe. So, the construction will hit Zimbabwe hard especially on transit delays for raw materials and other consumer goods imports. This will likely result in minor price adjustments and cost push inflation," said Bhoroma.

He said exporters should use dry ports.

In a note sent to the market on Friday, revenue authorities in Zimbabwe said they had adopted a similar strategy for the new Kazungula Border Post, which is due to be opened in the coming days.

With its modern facilities, and bigger space, Kazungula is expected to be one of the region's busiest ports, and Sadc countries are already taking steps to ensure the flow of goods through the facility is smooth, drawing lessons from experiences gained at Beitbridge and other entry points.

"Considering that Beitbridge Border Post is the busiest hub in facilitation of trade mainly between Zimbabwe and South Africa where trade of the two Sadc member States is in the region of 70%, this development is going to conjure up low trade activity and this will have pass through negative effects to other economic variables," said Tafadzwa Chisango, another economist.

"There is going to be a slight dip in the tax revenue which is the principal source of government revenue. However, South Africa is going to be more affected," he said.

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