Transport costs reforms in SADC: where are we and where are we going?
Logistics is important, both in its own right and as a factor that facilitates trade and development. The most recent South African Logistics Survey (CSIR, 2014) found that the industry was worth some R277 billion in 2013, comprising 12.8 percent of South Africa’s GDP. There does not appear to be a similar calculation for SADC as a whole.
It is possible to see the competitive development of SADC ports and corridors outside the established Durban-Gauteng axis as simply competing for a slice of this logistics market. The potential benefits delivered by such developments are much broader. Ports and corridors are part of the enabling environment. Once they are established and competitive they will facilitate economic activities that cannot even be imagined at this point. They are essential to the region’s integration project.
At the centre of this discussion must be the role of the Port of Durban and, behind it, the corridor running to SADC’s dominant economic region, Gauteng. Durban accounts for some 65% of South Africa’s container traffic, according to Transnet National Ports Authority (TNPA) and planning is being done to deal with a projected increase in volumes from 74 million tonnes to 175 million tonnes over 30 years. In the immediate future, container capacity is expected to increase from 3.2 million/year (2014) to 4.6 million in 2018.
It is well-known that Durban has a congestion problem especially in the back-of-port area. This congestion has been a factor in driving the development of rivals, especially the Port of Maputo in Mozambique. Maputo is geographically well-positioned to capture a portion of Gauteng’s traffic with the support of SADC’s flagship development corridor (the Maputo Development Corridor). However, Maputo has one major disadvantage: between it and the Gauteng market lies an international border compliance cost implications. Walvis Bay has an even bigger problem, being separated from Gauteng by two international borders and another country (Botswana).
Beyond Gauteng however lies the southern African region with its burgeoning markets and trade potential. Durban is not better positioned to service this market than rival SADC ports. To get goods from Durban, via Gauteng’s inland ports, into the African hinterland, it is necessary to navigate one of Africa’s most notorious border posts, Beit Bridge, between South Africa and Zimbabwe. This suggests that alternative logistics routes, terminating at ports like Walvis Bay, Lobito and Luanda, on southern Africa’s West coast, and Maputo, Beira, Nacala and Dar es Salaam (and possibly the Bagamoyo container port) on the east, have a window of opportunity. Some of the factors that affect costs – especially regulatory factors that increase costs, hassle and delays – on these corridors lie within the control of the national governments of SADC.
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