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23 May 2024 – The flow of goods across the border between South Africa and Eswatini takes an average of two-and-a-half hours. This was among the findings of a Time Release Study (TRS) aimed at identifying bottlenecks, streamlining procedures, and facilitating trade.
The study focused on the flow of trade between the two countries at the Oshoek-Ngwenya border post, with physical information-related data gathered over three days in November last year.
Prior research by the South African Institute of International Affairs shows that border delays in southern Africa can stretch to 36 hours and cost the region an estimated $48 million annually.
TRS is an internationally recognised World Customs Organisation (WCO) tool aimed at measuring the actual time it takes for the release of goods.
The Oshoek-Ngwenya TRS was conducted by the South African Revenue Service (Sars), Eswatini Revenue Service, the WCO in partnership with UK Aid, the South African Police Service, and the Border Management Authority.
The TRS is part of the World Trade Organisation’s trade facilitation agreement which aims to expedite the movement, release, and clearance of cross-border goods and to measure the effective cooperation between players involved in the trade flow.
Lifeblood
Trade is the lifeblood of an economy, and although there has been a slight decline in global imports and exports it still amounts to $24 trillion year on year, Sars commissioner Edward Kieswetter said at the release of the TRS findings.
South Africa shares border crossing points with six neighbouring countries: one with Zimbabwe, four with Botswana, seven with Eswatini (including Oshoek), one with Mozambique, five with Lesotho, and two with Namibia.
Oshoek facilitates 80% of the Southern African Customs Union (SACU) export volume and has the third-highest number of trucks passing through, making it the busiest border post within SACU. On average 600 trucks cross the South Africa and Eswatini border at Oshoek daily.
Kieswetter says trade flows between SA and Eswatini increased by R7.44 billion (15.7%) in 2023, due to an increase in exports of R4.22 billion (16.6%) and an increase in imports of R3.22 billion (14.6%).
The study aimed to identify constraints and bottlenecks, quantify and assess the results of ongoing trade facilitation projects and processes, and provide actionable recommendations to enhance the overall efficiency and effectiveness of customs clearance processes.
Kieswetter referred to the African Continental Free Trade Area (AfCFTA) agreement. Around $29o billion of the estimated $450 billion in potential income gains from the agreement would come from stronger trade facilitation measures.
These include reducing red tape and simplifying cross-border procedures to make it easier for African businesses to integrate into global supply chains.
Beyers Theron, Sars director of customs, says the TRS forms the baseline for the efficient cross-border flow of goods. “Collaboration must be put on steroids for the sake of our countries and for trade between the countries to make us globally competitive.”
Major challenges
A key challenge at the border post is the fact that truck drivers must queue with normal travellers at immigration. The queuing takes on average 23 minutes.
While passport verification takes on average one minute, it takes the driver an hour and 22 minutes to return to the truck and drive it to the control area. “We must keep the driver in the truck throughout the process,” says Theron.
Telecommunications and network capacity also pose challenges. Theron notes that a 10-minute wait for information technology-related status reports is simply unacceptable.
The data also reveals that 25% of goods are only cleared after the truck has arrived at Oshoek. Clearance must take place upstream to ensure a seamless experience for traders when they get to the border.
The study notes that cargo that has not been pre-cleared poses significant challenges to international trade and security.
“Without pre-clearance, shipments face increased risk of delays and disruptions at destination ports due to lengthy customs inspections. This can lead to significant financial losses for businesses and logistical headaches throughout the supply chain.”
The study also notes that the lack of pre-clearance creates opportunities for illicit activities, such as the smuggling of contraband or dangerous goods, which undermines border security efforts.
Additionally, delays in customs clearance can result in perishable goods spoiling, further impacting businesses and consumers.
“Overall, the absence of cargo pre-clearance hampers trade efficiency, increases operational costs, and heightens security risks, highlighting the importance of implementing pre-clearance procedures.”
Key recommendations
- Allocate dedicated immigration windows for truck drivers to expedite their clearance process or process drivers through immigration while in the truck;
- Invest in upgrading network coverage at the border to ensure timely communication of response messages to senders;
- Implement measures to expedite verification without compromising on accuracy, potentially leveraging technology to automate certain verification tasks; and
- Foster collaboration among relevant stakeholders, including customs authorities, immigration officials, trucking associations, and border communities.
Theron says it is important to provide a different experience for compliant traders. Technology, automation and upstream processing and clearance can ultimately provide a “non-stop” border experience for legitimate traders. Source: MoneyWeb