Cyclone Idai: Implications on trade for landlocked countries in Southern Africa

Trade facilitation entails the simplification, modernization and harmonization of export and import processes by ameliorating hindrances to cross-border trade of goods and services. Sovereign states and national agencies have a duty to establish road networks, seaports, airports and implement simplified border management systems to improve cross border trade. For African this is even more pertinent given the relatively low intra-Africa trade performance as compared to the rest of the world and eminent the African Continental Free Trade Area (AfCFTA).

The Mozambican port of Beira is a gateway for imports to landlocked countries in Southern Africa. Countries such as Malawi, Zambia and Zimbabwe heavily rely on Beira seaport for their exports to the rest of the world and imports into their domestic markets. However, following the massive destruction of the Beira seaport, roads and bridges as a result of Cyclone Idai, many cross-border traders will suffer severely. Similarly, consumers in landlocked countries are likely to bear the price.

Already for the past few months, Zimbabwe has been experiencing fuel shortages owing to foreign currency constraints. On 21 March 2019, Total Zimbabwe (Private) Limited, one of the largest petroleum trading company in Southern African Development Community issued a statement indicating that:

‘Following the devastating effect of cyclone Idai experienced in Mozambique, Malawi and Zimbabwe, the fuel supply chain logistics into Zimbabwe have been adversely affected… the jetty in Beira has been damaged and cannot receive vessels to discharge…’

Access to the Beira seaport has huge trade benefits for exporters and importers in landlocked countries. Transport costs are relatively low due to the shorter distance from Zimbabwe and Malawi countries to Beira as compared to other ports like Durban and Walvis Bay. As a result of the destruction caused by the cyclone, exporters and importers would have to use longer and costly routes to access markets. This will have an impact on the export competitiveness of their products.

Further, the massive destruction of infrastructure (road, bridges and warehouses) will not only result in increased transport and storage costs but there could shortage of essential goods. Operational costs for businesses will also increase due to the cutting off electricity and communication lines.

To alleviate the effects of the cyclone, it is recommended that the Government of Zimbabwe should accelerate the completion and operationalisation of its Walvis Bay dry port. In 2009, the Namibian Government granted landlocked SADC (Botswana, Zambia and Zimbabwe) land to construct their own dry port facilities. Botswana and Zambia’s dry ports have been operational while the Road Motor Services – a subsidiary of the National Railways require a significant amount of money for the operation of cargo handling and storage facility at the dry port.

The full operationalisation of the Zimbabwe dry port at Walvis Bay will offer importers and exports alternative trade routes that are less congested. Further, the dry port has the potential to increase trade flow and access to the Atlantic market of Europe. Hence, there is an urgent need to complete constructing the port so as to enhance trade, reduce transport and logistics costs and time. Zambia and Botswana are already realising these benefits; and Zimbabwe should do the same considering the disastrous effects of the cyclone.

Source: Obert Bore
LLM-International Trade Law (Distinction) (University of Cape Town); LLB (cum laude) (University of Venda) (2017 Mandela Rhodes Scholar)
Obert Bore is a legal practitioner employed at Scanlen & Holderness. He has previously monitored the South African Cape Town Parliament and compiled parliament reports for different Portfolio Committee meetings. He also previously served the Trade Law Centre and the Supreme Court of Namibia where he worked closely with the Chief Justice of Namibia and other appeal judges. He writes in his personal capacity, and can be reached at obertbore1@gmail.com