The UAE is Zimbabwe’s biggest export market outside southern Africa. But that trade has been declining at a substantial rate of 21 per cent a year from 2011 through to last year. Since the main source of Zimbabwe’s income is exports, the UAE is a crucial market for the southern African country.
To make this situation better and efficiently get its exports to market, Zimbabwe has to rethink its trade routes. As a landlocked country, the transport network that it is currently using is an obstacle to exports.
While Zimbabwe’s main export to the UAE is diamonds, which tend to be transported by air, a cost-effective land route is critical for bulky goods such as livestock animals, raw hides, iron and steel, pipes and ferrochromium, which were an important component of Zimbabwe’s US$148 million worth of exports to the UAE last year.
Bulk goods exported by Zimbabwe are first transported by road to the Durban port in neighbouring South Africa, where they will then be shipped to final destinations. While in transit from Zimbabwe to Durban, goods pass through the Beitbridge Border between the two countries. And this is a problem. Beitbridge is the busiest border in southern Africa. As Zimbabwe’s overall trade is concentrated around South Africa, there are always delays in cargo processing at the Beitbridge Border – lorries sometimes sit for a number of days at the border before being cleared. The South African Institute of International Affairs estimated last year that a delay of three days at Beitbridge increases transport costs by about $500 per lorry per day.
This adds to the cost of exporting bulk goods to overseas countries including the UAE, resulting in some exporters abandoning the UAE as a target market.
A leading industrialist and former chairman of the Business Council of Southern Africa, Oswell Binha, told The National that another problem is that South Africa has created an unsustainable inland costs regime. “Inland costs are sometimes more than the actual cargo prices, including freight. South Africa has also created another regime of inefficiencies through a plethora of by-laws and legislation, which do not support exporters,” Mr Binha said.
But there is an escape that Zimbabwe can pursue to optimise its overseas exports. There is another corridor to the sea, the Beira Corridor, which leads to the Beira port in Mozambique, with important potential advantages that Zimbabwean exporters could tap into.
The distance between Harare, Zimbabwe’s capital, and Beira is only 559 kilometres, while that between Harare and Durban is 1,683km.
Mr Binha said the Beira Corridor has for a long time been a more economically viable option. “We enjoy a number of advantages – not only an export transit route. But also a trade facilitation gateway. We enjoy excellent political relations with Mozambique. Beira is the shortest route to the sea [Indian Ocean] for Zimbabwe too,” he said.
Exports to the UAE from not only Zimbabwe but other countries in southern Africa, such as Zambia and Malawi, have the potential to increase substantially if the Beira port was utilised instead of the Durban port.
The challenge with the Forbes border crossing between Zimbabwe and Mozambique is that it was initially built for tourism vehicles and not lorries carrying cargo – although some of these use the border; and there are still landmines on the sidelines of the border, planted during Zimbabwe’s civil war. The border, therefore, needs to be expanded to accommodate a significant movement of lorries carrying cargo.
The Zimbabwe authorities hinted last year that they were engaging potential developers for a multibillion-dollar infrastructure project that will link Zimbabwe with the Beira Corridor. But no progress has been registered to date.
Clemence Machadu is an economics writer based in Harare. An annual conference on investing in Africa concludes on Thursday in Dubai.
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