Border delays damage Zim economy

By Phillimon Mhlanga

HARARE – Zimbabwean firms are haemorrhaging from costs incurred from delays at the country’s borders, which they blame on the Zimbabwe Revenue Authority (ZIMRA).

According to industry sources, the delays are being caused by the revenue collector’s centralised declaration system under which bill of entry documents are no longer processed at border posts.

Instead, the documents are now being processed in Harare, Bulawayo and Masvingo. These are the three centres that clear passage of vehicle at the borders.

The borders are linked to the three centres by a telecommunications system provided by two mobile telecommunications firms.

But the clearing process experiences problems because the bandwidth provided by the two telecommunications service providers is said to be always down, delaying trucks at the border posts. Cargo trucks often wait for clearance at the border for days.

Sources within the freight forwarding industry said firms were losing millions of dollars, much of which was going into demurrage fees charged by cargo shipment firms.

A demurrage is a charge payable to the owner of a freight truck on failure to load or discharge the cargo truck within the agreed time.

Businesses moving goods from outside the country are paying between US$250 and US$500 in demurrage fees for delays experienced at the border.

The delays, which sources say can stretch for about two weeks, means that companies attract carrying costs and other expenses that could bring total expenses to several millions of dollars.

Some firms are understood to be considering air freighting some goods to avoid the border delays, although this alternative form of transport is much more expensive. Big firms, which had been unscathed before by the delays, are now feeling the impact.

One source within the industry said the situation had gone from “manageable to bad”.
The delays at the border could also shorten the sales window for some goods and also hamper the growth of intra-regional trade.

This could hurt the already frail Zimbabwean economy, causing huge losses in potential revenue.

“We are losing millions of dollars due to delays at the border posts,” said Shingirai Mushawedu, a supply chains manager at Chloride Zimbabwe.

“The time ZIMRA takes to resolve issues costs us a lot of money. They take close to a week or more than that to resolve issues. This is having a significant negative impact on our business. We are losing money in potential revenue because of this and their duties are punitive. We order goods from the Common Market for Eastern and Southern Africa (COMESA) member states such as Kenya but when these goods arrive at the Chirundu border post with a certificate of origin, they say they don’t recognise it (the certificate).

“If we produce this certificate, we are supposed to pay 30 percent as duty but ZIMRA insists on us paying 60 percent because they disregard this (COMESA) certificate,” added Mushawedu.

Shipping and Freight Forwarding Agents’ Association of Zimbabwe chief executive officer, Joseph Musariri, confirmed there were serious delays at the country’s border posts.

“We have some challenges at the country’s border posts,” Musariri said.

“You will find that at Beitbridge border post, physical inspection of goods is not done at the post but at Cargo Carriers which is a kilometre or so from the border. Trucks have to be escorted to the (Cargo Carriers) deport.

“When you get there the carrying space at the deport is small and you get a lot of trucks most of them with issues and would have been seized by ZIMRA.

“You will also find that a good number of trucks would be consolidated and would have seven clearance agents. This means that a truck cannot be opened if one of the agents is not there,” said Musariri.

Musariri added that the centralised declaration system had also caused delays due to down time.

“Bill of entry documents are no longer processed at the border posts as ZIMRA is in the process of centralising its declaration system. These are now being processed at three centres — Bulawayo, Harare and Masvingo.

“But the bandwith down time is serious. They (ZIMRA) always say they will sort it out but this is delaying trucks quite a lot.

“Bulawayo office handles the Beitbridge, Plumtree, Victoria Falls and Kazungula border posts documents, with Harare handling the Chirundu and Nyamapanda border posts documents while Masvingo handles documents from Forbes, Mutare, Kwekwe and Gweru,” said Musariri.

“At Chirundu border post, we had serious problems with certificates of origin emanating from the COMESA member States. This had to do with signatures which ZIMRA said were different from what they have in their data base. As a result, trucks spent many days at the border post and in such a situation transporters charge between US$250 and US$500 per day as demurrage.”

Tendai Mutsvangwa, of ChiMuts Solar Zimbabwe, weighed in, saying: “The time we spend at the border awaiting clearance is too long. Trucks spend a lot of time at the border with ZIMRA having to do physical inspection. After that they will still be confused and will escort trucks to Manica storage in Harare for another physical inspection. They keep dragging and this could take up to 14 days. With these delays, we lose lots of money.”

Though ZIMRA’s excise and bond manager, John Cochrane, admitted that there were delays at the border posts, he implored companies to refer cases to do with COMESA certificates of origin to the tax collector’s international desk through ZIMRA’s regional managers.

“We are aware of delays at the border posts but there are serious issues where people purport that goods are coming from a COMESA member state like Zambia yet goods are coming from Brazil,” said Cochrane while addressing an Energy Council of Zimbabwe workshop last week.

“Maybe the papers were signed by somebody not on the signature list or that the sample of the signature has not yet arrived at the border post.

“But a quicker way of resolving this is for you to pay a deposit and the matter is referred through regional managers to our international desk. This way, it should not take that long,” said Cochrane. Financial Gazette