AfCFTA – an uphill struggle in quest for regional trade on the continent

Picture : Bloomberg.com

The following article was published by Bloomberg and sketches the day-to-day hardship for cross border trucking through Africa. In a sense it asks the very questions and challenges which the average African asks in regard to the highly anticipated free trade area. While rules of origin and tariffs form the basis of trade across borders, together with freedom of movement of people, these will mean nothing if African people receive no benefit. As globalisation appears to falter across Europe and the West, it begs the question whether this is in fact is the solution for Africa; particularly for the reason that many believe globalisation itself is an extension of capitalism which some of the African states are at loggerheads with. Moreover, how many of these countries can forego the much need Customs revenue to sustain their economies, let alone losing political autonomy – only time will tell.

Nyoni Nsukuzimbi drives his 40-ton Freightliner for just over half a day from Johannesburg to the Beitbridge border post with Zimbabwe. At the frontier town—little more than a gas station and a KFC—he sits in a line for two to three days, in temperatures reaching 104F, waiting for his documents to be processed.

That’s only the start of a journey Nsukuzimbi makes maybe twice a month. Driving 550 miles farther north gets him to the Chirundu border post on the Zambian frontier. There, starting at a bridge across the Zambezi River, trucks snake back miles into the bush. “There’s no water, there’s no toilets, there are lions,” says the 40-year-old Zimbabwean. He leans out of the Freightliner’s cab over the hot asphalt, wearing a white T-shirt and a weary expression. “It’s terrible.”

By the time he gets his load of tiny plastic beads—the kind used in many manufacturing processes—to a factory on the outskirts of Zambia’s capital, Lusaka, he’s been on the road for as many as 10 days to traverse just 1,000 miles. Nsukuzimbi’s trials are typical of truck drivers across Africa, where border bureaucracy, corrupt officials seeking bribes, and a myriad of regulations that vary from country to country have stymied attempts to boost intra-African trade.

The continent’s leaders say they’re acting to change all that. Fifty-three of its 54 nations have signed up to join only Eritrea, which rivals North Korea in its isolation from the outside world, hasn’t. The African Union-led agreement is designed to establish the world’s biggest free-trade zone by area, encompassing a combined economy of $2.5 trillion and a market of 1.2 billion people. Agreed in May 2019, the pact is meant to take effect in July and be fully operational by 2030. “The AfCFTA,” South African President Cyril Ramaphosa said in his Oct. 7 weekly letter to the nation, “will be a game-changer, both for South Africa and the rest of the continent.”

It has to be if African economies are ever going to achieve their potential. Africa lags behind other regions in terms of internal trade, with intracontinental commerce accounting for only 15% of total trade, compared with 58% in Asia and more than 70% in Europe. As a result, supermarket shelves in cities such as Luanda, Angola, and Abidjan, Ivory Coast, are lined with goods imported from the countries that once colonized them, Portugal and France.

By lowering or eliminating cross-border tariffs on 90% of African-produced goods, the new regulations are supposed to facilitate the movement of capital and people and create a liberalized market for services. “We haven’t seen as much institutional will for a large African Union project before,” says Kobi Annan, an analyst at Songhai Advisory in Ghana. “The time frame is a little ambitious, but we will get there.”

President Nana Akufo-Addo of Ghana and other heads of state joined Ramaphosa in hailing the agreement, but a number of the businesspeople who are supposed to benefit from it are skeptical. “Many of these governments depend on that duty income. I don’t see how that’s ever going to disappear,” says Tertius Carstens, the chief executive officer of Pioneer Foods Group Ltd., a South African maker of fruit juices and cereal that’s being acquired by PepsiCo Inc. for about $1.7 billion. “Politically it sounds good; practically it’s going to be a nightmare to implement, and I expect resistance.”

Under the rules, small countries such as Malawi, whose central government gets 7.7% of its revenue from taxes on international trade and transactions, will forgo much-needed income, at least initially. By contrast, relatively industrialized nations like Egypt, Kenya, and South Africa will benefit from the outset. “AfCFTA will require huge trade-offs from political leaders,” says Ronak Gopaldas, a London-based director at Signal Risk, which advises companies in Africa. “They will need to think beyond short-term election cycles and sovereignty in policymaking.”

Taking those disparities into account, the AfCFTA may allow poorer countries such as Ethiopia 15 years to comply with the trade regime, whereas South Africa and other more developed nations must do so within five. To further soften the effects on weaker economies, Africa could follow the lead of the European Union, says Axel Pougin de La Maissoneuve, deputy head of the trade and private sector unit in the European Commission’s Directorate General for Development and International Cooperation. The EU adopted a redistribution model to offset potential losses by Greece, Portugal, and other countries.

There may be structural impediments to the AfCFTA’s ambitions. Iron ore, oil, and other raw materials headed for markets such as China make up about half of the continent’s exports. “African countries don’t produce the goods that are demanded by consumers and businesses in other African countries,” says Trudi Hartzenberg, executive director of the Tralac Trade Law Center in Stellenbosch, South Africa.

Trust and tension over illicit activity are also obstacles. Beginning in August, Nigeria shut its land borders to halt a surge in the smuggling of rice and other foodstuffs. In September, South Africa drew continentwide opprobrium after a recurrence of the anti-immigrant riots that have periodically rocked the nation. This could hinder the AfCFTA’s provisions for the free movement of people.

Considering all of these roadblocks, a skeptic would be forgiven for giving the AfCFTA little chance of success. And yet there are already at least eight trade communities up and running on the continent. While these are mostly regional groupings, some countries belong to more than one bloc, creating overlap. The AfCFTA won’t immediately replace these regional blocs; rather, it’s designed to harmonize standards and rules, easing trade between them, and to eventually consolidate the smaller associations under the continent­wide agreement.

The benefits of the comprehensive agreement are plain to see. It could, for example, limit the sort of unilateral stumbling blocks Pioneer Foods’ Carstens had to deal with in 2019: Zimbabwe insisted that all duties be paid in U.S. dollars; Ghana and Kenya demanded that shippers purchase special stickers from government officials to affix to all packaging to prevent smuggling.

The African Export-Import Bank estimates intra-African trade could increase by 52% during the first year after the pact is implemented and more than double during the first decade. The AfCFTA represents a “new pan-Africanism” and is “a pragmatic realization” that African countries need to unite to achieve better deals with trading partners, says Carlos Lopes, the former executive secretary of the United Nations Economic Commission for Africa and one of the architects of the agreement.

From his closer-to-the-ground vantage point, Olisaemeka Anieze also sees possible benefits. He’s relocating from South Africa, where he sold secondhand clothes, to his home country of Nigeria, where he wants to farm fish and possibly export them to neighboring countries. “God willing,” he says, “if the free-trade agreement comes through, Africa can hold its own.”

In the meantime, there are those roads. About 80% of African trade travels over them, according to Tralac. The World Bank estimates the poor state of highways and other infrastructure cuts productivity by as much as 40%.

If the AfCFTA can trim the red tape, at least driving the roads will be more bearable, says David Myende, 38, a South African trucker resting after crossing the border post into South Africa on the way back from delivering a load to the Zambian mining town of Ndola. “The trip is short, the borders are long,” he says. “They’re really long when you’re laden, and customs officers can keep you waiting up to four or five days to clear your goods.” 

Source: article by Anthony Sguazzin, Prinesha Naidoo and Brian Latham, Bloomberg, 30 January 2020

SA Parliament adopts report on Border Management Authority Bill

Several media reports have recently published misleading information in regard to the South African Revenue Service and the Border Management Authority Bill. The following statement by Parliamentary Communication Services offers context in the matter –

Parliament adopts report on Border Management Authority Bill

Border Management Authority bill takes another step towards becoming law

The Portfolio Committee on Home Affairs adopted a report on the Border Management Authority Bill [B9B-2016] and will recommend to the house to adopt and pass the Bill into an Act of Parliament.

The adoption follows the recommendations and amendments made by the Select Committee on Security and Justice while processing the Bill. The committee agreed that the amendments are valid and strengthen the Bill to ensure that it delivers on its mandate.

An important amendment made by the National Council of Provinces is to highlight the consensus reached between the Minister of Finance and Minister of Home Affairs, which removes the South African Revenue Services from the application of the Act. “We appreciate that the two departments have reached a consensus on how to handle the custom-related issues at port of entries, which has been a major sticking point impeding the completion of the Bill,” said Advocate Bongani Bongo, the Chairperson of the committee.

The committee welcomes the fact that as a result of this consensus, the Bill commits both the Department of Home Affairs and National Treasury to agree on an implementation protocol to enable seamless functioning and co-ordination of border management areas within six months of the implementation of the Act.

The committee is of the considered view that the passing of the BMA Bill is a step in the right direction to secure our borders and end fragmentation within this environment. The committee will table its report before the National Assembly and recommend that the Bill be passed and sent to the President for assent into law.

Regarding the performance of the department in quarter three and four, the committee notes the piloting of an e-visa in Kenya. While the committee is aware that this pilot phase should have been rolled out to six missions across the world, it nonetheless welcomes the announcement that the pilot will be extended to India, Nigeria and China in the course of this quarter. The committee has urged the department to fix teething problems identified and to conclude the piloting stage with the aim of introducing the programme.

The fight against corruption is an important pillar in strengthening accountability and good governance. In line with this, the committee welcomes the announcement that 86.6% of the department’s fraud and corruption cases are finalised within 90 days. The committee continues to emphasise the need for the speedy finalisation of corruption cases and the sanctioning of departmental employees.

The committee will continue to monitor the implementation of the Annual Performance Plan to ensure delivery of services to the people.

For media enquiries or interviews with the Chairperson:

Committee’s Media Officer
Malatswa Molepo 
Parliamentary Communication Services

18 February 2020

AU – Online tool to remove Trade Barriers in Africa goes live

An online platform developed by UNCTAD and the African Union to help remove non-tariff barriers to trade in Africa became operational on 13 January.

Traders and businesses moving goods across the continent can now instantly report the challenges they encounter, such as quotas, excessive import documents or unjustified packaging requirements.

The tool, tradebarriers.africa, will help African governments monitor and eliminate such barriers, which slow the movement of goods and cost importers and exporters in the region billions annually.

An UNCTAD report shows that African countries could gain US$20 billion each year by tackling such barriers at the continental level – much more than the $3.6 billion they could pick up by eliminating tariffs.

“Non-tariff barriers are the main obstacles to trade between African countries,” said Pamela Coke-Hamilton, director of UNCTAD’s trade division.

“That’s why the success of the African Continental Free Trade Area depends in part on how well governments can track and remove them,” she said, referring to the agreement signed by African governments to create a single, continent-wide market for goods and services.

The AfCFTA, which entered into force in May 2019, is expected to boost intra-African trade, which at 16% is low compared to other regional blocs. For example, 68% of the European Union’s trade take place among EU nations. For the Asian region, the share is 60%.

The agreement requires member countries to remove tariffs on 90% of goods. But negotiators realized that non-tariff barriers must also be addressed and called for a reporting, monitoring and elimination mechanism.

The online platform built by UNCTAD and the African Union is a direct response to that demand.

Hands-on training

Complaints logged on the platform will be monitored by government officials in each nation and a special coordination unit that’s housed in the AfCFTA secretariat.

The unit will be responsible for verifying a complaint. Once verified, officials in the countries concerned will be tasked with addressing the issue within set timelines prescribed by the AfCFTA agreement.

Hands-on training

UNCTAD and the African Union trained 60 public officials and business representatives from across Africa on how to use the tool in December 2019 in Nairobi, Kenya.

They practiced logging and responding to complaints, in addition to learning more about non-tariff barriers and their effects on trade and business opportunities.

“The AfCFTA non-tariff barriers mechanism is a transparent tool that will help small businesses reach African markets,” said Ndah Ali Abu, a senior official at Nigeria’s trade ministry, who will manage complaints concerning Africa’s largest economy.

UNCTAD and the African Union first presented tradebarriers.africa in July 2019 during the launch of the AfCFTA’s operational phase at the 12th African Union Extraordinary Summit in Niamey, Niger.

Following the official presentation, they conducted multiple simulation exercises with business and government representatives to identify any possible operational challenges.

Lost in translation

One of the challenges was linguistic. Africa is home to more than 1,000 languages. So the person who logs a complaint may speak a different language from the official in charge of dealing with the issue.

Such would be the case, for example, if an English-speaking truck driver from Ghana logged a complaint about the number of import documents required to deliver Ghanaian cocoa to importers in Togo – a complaint that would be sent to French-speaking Togolese officials.

“For the online tool to be effective, communication must be instantaneous,” said Christian Knebel, an UNCTAD economist working on the project.

The solution, he said, was to add a plug-in to the online platform that automatically translates between Arabic, English, French, Portuguese and Swahili – languages that are widely spoken across the continent. More languages are being added.

UNCTAD’s work on the AfCFTA non-tariff barriers mechanism is funded by the German government.

Source: UNCTAG.ORG, 17 January 2020

SADC Border posts under the spotlight

GEC

Land borders in the SADC region are critical zones for unlocking economic development, regional value chains and trade. In this light the Global Economic Governance Africa programme is working with the Zimbabwe Trade Forum and the University of Zambia to look at two case studies on the border regions around Beitbridge and Chirundu. The borders, between South Africa and Zimbabwe, and Zimbabwe and Zambia, represent critical links in the North-South Corridor and are vital in both regional development initiatives as well as bilateral ones between the countries.

The seminar, attended by trade experts, policy makers and researchers from South Africa and the region discussed the field research findings of a study at the Beitbridge and Chirundu border posts conducted on behalf of the programme in June 2018.

The following presentation documents should be of interest to all parties concerned with inter regional trade and trade facilitation development initiatives.

It is also worthwhile to visit Tutwa Consulting’s webpage as it explains how the surveys were conducted and provides salient features in relation to each of the border posts concerned which may not necessarily be apparent in the presentation documents as such.

Source: Tutwa Consulting

Cigarette Smuggling in Logs

UK’s “New Customs Partnership” – may grant Europe oversight of the Customs border

UK Brexit

Reuters reports that Britain will not rule out the possibility that the EU may retain oversight of customs controls at UK borders after it leaves the bloc, as the country seeks ways to keep unhindered access to EU markets following Brexit.

Last week, the UK published a policy document proposing two possible models for customs arrangements between Britain and the EU after withdrawal from the EU in 2019.

The first model was a “highly streamlined customs arrangement”, which involved the reintroduction of a customs border but which envisaged electronic tracking of shipments, rather than physical checks of goods and documents at the border.

An alternative proposal was the “new customs partnership”, which would remove the need for a customs border between the UK and EU altogether.

Under this model, the UK would operate as if it was still part of the bloc for customs purposes. British goods would be exported tariff-free and Britain would levy EU tariffs on goods coming into the UK for onward passage to the EU directly or as components in UK exports.

Lawyers said there would be a need for a mechanism to oversee the “new customs partnership” to ensure that the UK was correctly monitoring goods coming into the UK and destined for Europe.

The EU’s system of movement of goods across EU borders without checks works on the basis all members closely monitor shipments coming into the bloc from outside, to ensure the correct tariffs are paid and that goods meet EU standards.

The antifraud agency of the EU polices customs agencies across Europe to ensure that they are correctly monitoring imports. Source: Reuters, Bergin T, August 21, 2017

SA Donkeys ‘ferry’ illicit vehicles into Zimbabwe

Police are on high alert looking for a syndicate that uses donkeys to smuggle luxury cars across the Limpopo River into the Zimbabwe.

Thieves tied ropes to the cars which were hitched on to the donkeys to pull the cars across the river.

Some cars are driven through the drier parts of the river. On Tuesday, a Mercedes Benz C220 was intercepted before it disappeared into Zimbabwe.

“Our members were just in time to pounce on them after the donkeys were apparently no longer able to pull it through the sand,” Brigadier Motlafela Mojapelo  for the SA Police Service said.

The suspects fled into the bushes towards Zimbabwe side. Most of the cars are being smuggled across the river through the border between South Africa and Zimbabwe, south of Beitbridge border post.

In December, police recovered a Hilux bakkie when thieves attempted to smuggle it through the river. The bakkie was stolen in Durban.

It was semi-submerged in the water when Limpopo police commissioner Lieutenant-General Nneke Ledwaba spotted it from a helicopter while he was leading a high-density operation in Musina and Beitbridge.

The vehicle and donkeys were abandoned in the middle of the river and the suspect fled into Zimbabwe. It is not clear why the thieves do not simply driver the car into Zimbabwe – one reason might be that most modern cars are fitted with a tracking device which uses satellite tracking to locate a vehicle, if stolen. The tracker is only active when the car is running.

Mojapelo said 13 vehicles have been recovered since January this year. Thieves target luxury bakkies, SUV’s, specifically Toyota and Isuzu. Gauteng and KwaZulu-Natal are the two provinces that are mostly affected.

Last week, four vehicles were recovered. A Range Rover worth R900 000 was recovered after police intercepted it at the Beitbridge border post. The vehicle was en route to Malawi. The man was arrested and was found in possession of cash with an estimated amount of R30 000.

Mojapelo said the car had Limpopo registration numbers, but it was still unclear where it was stolen. Source: Pictures – SAPS and article – Iavan Pijoos, News24, 2 August 2017.

Mozambique – Single Road Cargo Manifest Phase II

Mozambique flagThe Maputo Corridor Logistics Initiative (MCLI) recently published a communication informing it’s stakeholders about the Single Road Cargo Manifest as received from the Mozambican Revenue Authority (MRA).

The MRA has informed MCLI that the 2nd phase of the Single Road Cargo Manifest process will come into effect from the 16th of June 2017, when all international road carriers transporting goods to Mozambique through the Ressano Garcia border post will be required to submit the Road Cargo Manifest on the Single Electronic Window platform in compliance with national and international legislation. MRA Service Order Nr 17/AT/DGA/2017, in both Portuguese and English, is attached for your consideration.

For information and full compliance by all members of staff of this service, both (National and Foreign) International Cargo Carriers, Clearing Agents, Business Community, Intertek and other relevant stakeholders, within the framework of the ongoing measures with a view to adequate procedures related to the submission of the road cargo manifest, for goods imported through the Ressano Garcia Border Post, in strict compliance to both the national and international legislations, it is hereby announced that, the pilot process for transfer of competencies in preparation and submission of the road cargo manifest to Customs from the importer represented by his respective Clearing Agent to the Carrier is in operation since December 2016.

Indeed, the massification process will take place from 15th of April 2017 to 15th of June 2017, a period during which all international carriers (national and foreign) who use the Ressano Garcia Border, are by this means notified to register themselves for the aforementioned purposes following the procedures attached herewith to the present Service Order.

As of 16th of June 2017, the submission of the road cargo manifest into the Single Electronic Window (SEW) for the import regime, at Ressano Garcia Border, shall be compulsory and must be done by the carrier himself.

International road carriers must therefore register for a NUIT number with the Mozambican Revenue Authority between the 15th of April and the 15th of June 2017 and the necessary application form is included. Road carriers are urged to do so as soon as possible to enable the continued smooth flow of goods through the border post.

Specific details can be found here! 

Source: MCLI

Belissima!

The South African Revenue Service (SARS) has seized a Ferrari that was smuggled into the country. The luxury vehicle worth an estimated R13.8m was stored at a warehouse in South Africa since 2014.

In February 2015, however, the vehicle’s owner submitted an export declaration to take the car to the Democratic Republic of Congo through Beitbridge border post. A day later, there was an attempt to have the vehicle returned to South Africa through the same border post.

The vehicle has been detained and a letter of intent has been issued to the owner in terms of the Promotion of Administrative Justice Act No 3 of 2000 to enable them to make representation to SARS.

Zim Revenue Scourge – porous borders lose millions

cigarettes

The Zimbabwe Herald suggests that Zimbabwe could be losing millions of dollars in unpaid taxes due to rampant smuggling of cigarettes into South Africa, investigations by this paper have revealed.Between 2014 and 2015, local customs officials seized nearly 2 500 cartons worth around $500 000 in taxes, according to the Zimbabwe Revenue Authority.

Figures from the South African side are staggering, showing a wide discrepancy in the value of confiscated contraband between the two neighbouring southern African countries.

The South African Revenue Service told The Herald Business that it had seized R87 million (US$6,2 million) worth of Zimbabwean cigarettes since 2014, or 95 million sticks.

This will likely be worth millions of dollars in evaded tax in Zimbabwe, but the ZIMRA director for legal and corporate services Ms Florence Jambwa said the figures were difficult to determine because smuggling was an underground trade.

South Africa, however, says it loses an estimated R40 million (US$2,9 million) to cigarette smuggling each year, on the average, more than half of it Zimbabwe-related.

And this is just from what is on public record. Customs officials from both countries admit the figures could be higher. Both are also greatly incapacitated to detect illegal trades quickly.

“It is difficult to measure the levels of smuggling as this is an underground activity mostly done through undesignated entry points,” said ZIMRA’s Jambwa, by email.

“The value of the potential loss cannot be easily ascertained,” she said, failing to provide an estimate.

Tax analyst Mr Tendai Mavhima said the figures from ZIMRA represent only a small portion of the actual amount of money Zimbabwe is losing to trafficking of cigarettes.

“The disparity in figures (ZIMRA and SARS figures) indicate there are problems in controls on either side, which may result in the revenue and tax losses from both countries being understated,” he said by telephone.

Zimbabwe is the world’s fifth largest producer of tobacco after China, the USA, Brazil and India.

The country produces flue-cured Virginia tobacco, considered to be of extremely high quality and flavour, according to a report on Zimbabwean tobacco companies by local stockbroking firm, IH Securities.

As such, Zimbabwean tobacco ends up in many top cigarette brands across the world, it says.

It is especially popular in China, the largest importer of Zimbabwean tobacco, and in South Africa, the country’s largest trading partner.

In South Africa, Zimbabwean cigarettes are on demand for two key reasons: high quality and affordability.

It costs just $1,50 for 20 sticks in Zimbabwe compared to $3,20 for the same number of sticks in South Africa, according to estimates by regional economic bloc, SADC.

The South African Revenue Service (SARS) said: “Cigarette clientele opt for cheaper cigarettes. The high supply and demand for illicit cigarettes creates the market for it.”

South Africa imposes very high taxes on cigarette imports – about 80 percent meaning many Zimbabwean dealers choose to export illegally.

SADC says illegal dealers supply nearly two thirds of the number of cigarettes smoked by South Africans.

In 2011 alone, at least 4 billion cigarettes smuggled into South Africa originated from Zimbabwe, it says.

The undeclared cigarettes are usually concealed in trucks, buses and other vehicles destined for South Africa by organised cartels, said Florence Jambwa of ZIMRA.

Sometimes the cargo is shipped at undesignated points on the porous border between the two countries. Source: Zimbabwe Herald

Davis Tax Committee pronounces on BMA

DTCRecent speculation concerning the Border Management Agency Bill have brought about reaction from both within government and industry. While there appears widespread support for a unified agency to administer South Africa’s borders, the challenge lies in the perceived administration of such agency given the specific mandates of the various border entities.

The Davis Tax Committee (DTC) was requested to provide a view on the affect of the proposed bill insofar as it impacts upon revenue (taxes and customs and excise) collection for the fiscus of South Africa.

The purpose of the Bill is to provide for the establishment, organisation, regulation and control of the Border Management Agency (BMA); to provide for the transfer, assignment, and designation of law enforcement border related functions to the BMA; and to provide for matters connected thereto. The functions of the BMA are (a) to perform border law enforcement functions within the borderline and at ports of entry; (b) to coordinate the implementation of its border law enforcement functions with the principal organs of state and may enter into protocols with those organs of state to do so; and (c) to provide an enabling environment to facilitate legitimate trade.

In short the DTC recommends that the functions and powers of SARS and the BMA be kept separate and that the Agency should not be assigned any of the current functions and powers of SARS with regard to revenue (taxes and customs and excise) collection and the control of goods that is associated with such collection functions. Of particular concern is the extraordinarily poor timing of the Bill. According to the 2014 Tax Statistics issued by SARS, the total of customs duties, import VAT, and ad valorem import duties collected amounted to R176.9 billion for the 2013-14 fiscal year. This was approximately 19% of the total revenue collected.

The DTC is of the view that to put so significant a contribution to the fiscus in a position of uncertainty, if the Bill were to be  implemented, is fiscally imprudent at this critical juncture for the South African economy. Follow this link to access the full report on the DTC website. Source: www.taxcom.org.za

Red Flags hang over BMA

Mesina-Beitbridge border crossing - Google MapsAccording to Eye Witness News, a draft law aimed at creating a new, overarching border control entity has run into problems.

Parliament’s Home Affairs Portfolio Committee has been briefed on the Border Management Authority Bill by the department, the South African Police Service (Saps) and National Treasury.

Cabinet approved the Bill in September 2015 to deal with weaknesses in the state’s ability to secure the country’s ports of entry.

The Bill proposes harnessing the responsibilities of Home Affairs, the police and the South African Revenue Service (Sars) among others in one agency under a commissioner.

The authority will take over the customs control functions currently undertaken by the South African Revenue Service. There are fears within the industry that it could compromise SARS’s achievements in modernising its customs administration that has facilitated the movement of goods across the border.

Red flags have been raised by both the SA Police Service and National Treasury over the Border Management Authority Bill.

Treasury’s Ismail Momoniat says while they support a single border control body, SARS must remain in charge of customs and excise and revenue collection.

“We’re talking of significant revenue collection, and that is a speciality… The Bill is a framework, it’s important it doesn’t generate uncertainty for an important institution like SARS.

The authority will be governed by a commissioner and overseen by an interministerial consultative committee, a border technical committee and advisory committees.

The SAPS’ Major General David Chilembe says the Constitution says South Africa must have a single police force. He says it may have to be amended if the new border authority takes over policing duties.

Chilembe also says the police, and not Home Affairs, should lead the new entity. Source: EWN.

ZIMRA Warehouse Burns Amid Protests

Zimbabweans protesting against restrictions on imports of basic goods from South Africa have forced the closure of the border post between Zimbabwe and South Africa on Friday.

On June 17, the Zimbabwean government said that it was suspending imports of products including bottled water, furniture, building materials, steel products, cereals, potato crisps and dairy products, most of which arrive from South Africa. A Statutory Instrument No. 64 of 2016 which effectively tightens the screws on the import of these products is purportedly intended to target businesses and not ordinary travellers buying goods for personal consumption. However, Zimbabwean Revenue Authority (ZIMRA) officials continued to demand permits and confiscate the listed goods, sparking the chaos.

A warehouse owned by ZIMRA for the storing of illicit goods seized from people crossing the border was set alight by the protesters on Friday, 1 July 2016.

More than 85% of working age Zimbabweans have no formal job and many make a living by buying goods in South Africa to sell in Zimbabwe. Source: New Zimbabwean/ Reuters.

BMA – to be first order of business when Parliment re-opens

Lebombo+border+postA “Unified border guard and authority” will be one of the first orders of business when Parliament opens for the third quarter of the year.

On the agenda for the portfolio committee on home affairs is “processing the Border Management Authority Bill — which‚ a statement noted‚ is a modified name as “the authority was called the agency in the former draft of the bill”‚ it said at the weekend.

It was necessitated by “inefficiencies resulting from having many government departments co-ordinating, and often duplicating, the securing of SA’s land‚ sea and air borders,” which “have contributed to the porous 5,244km border”.

“The bill and related authority aim to centralise the border-related responsibilities of‚ amongst others‚ the Department of Home Affairs‚ the South African National Defence Force and Police Service‚ Customs of the South African Revenue Service as well as aspects of the Departments of Agriculture‚ Environment and Health‚” the committee said in the statement.

After briefings‚ public hearings and written submissions‚ it is “likely to be finalised in the last quarter of 2016 or early in 2017”.

Also on the committee’s plate is “reliable higher bandwidth network services” needed by the Department of Home Affairs “to facilitate the expanded roll-out of technology-driven service delivery improvements”.

“These include paperless applications for more secure smart identification cards and passports as well as online visa and permits processes. The Department of Home Affairs has experienced challenges with the network services provided by the State Information Technology Agency and is in the process of seeking alternatives.” Source: Buisness Day Live

ZIMRA – : Challenges to New Clearance Regulations

ZIMRAaaaaaaaThe implementation of the Government’s new pre-shipment regulations under the Consignment Based Conformity Assessment (CBCA) programme (essentially a fancy term for plain old pre-shipment inspection – who they trying to fool?) took off with host of challenges last Tuesday. The new regulations that were gazetted into law on 18 December last year and requires that goods be tested for conformity with required standards prior importation into Zimbabwe, went into operation on 1 March.

Government introduced the programme with the view to reduce hazardous and substandard imported products and improve customs duty collection. Bureau Veritas has been appointed by the Ministry of Industry and Commerce for the verification and the assessment of conformity of goods in exporting countries.

The new developments have seen cargo piling up on the South African side of the border with most importers failing to produce the required transitional certificate of conformity. The Shipping and Forwarding Agents Association of Zimbabwe (SFAAZ) chief executive officer, Mr Joseph Musariri, called on the government to waive the implementation of the CBCA on goods that were shipped before it became operational.

“You will note that the Zimbabwe Revenue Authority (Zimra) has failed to enforce the regulations since 18 December last year only to try and implement it this week (last week) and that has resulted in a chaotic situation.

“It is sad that cargo is piling up at Beitbridge border post where most importers are having challenges in acquiring the transitional CBCA certificates,” he said.

Mr Musariri said the government introduced the idea on 27 July last year but could not implement it since there was no legislation to that effect.

He said under the new dispensation all products regulated by the Ministry of Industry and Commerce of Zimbabwe exported into Zimbabwe must be accompanied by a CBCA certificate.

“The categories of goods regulated under the programme include the following: food and agriculture, building and civil engineering, petroleum and fuels , packaging material, electrical/electronic products, body care, automotive and transportation , clothing and textile and toys,” he said.

Mr Musariri said Zimra was now refusing to clear goods without the CBCA certificate and requesting for the conformity certificates.

“They are telling those importers to contact the nearest offices for Bureau Veritas for inspections and issuance of the requisite certificates.

“Locally destined cargo which is being shipped from various overseas markets is the worst affected and importers are incurring daily demurrage expenses of between $250 and $5000.

“In some cases duties had been paid to Zimra but now they are singing a different song,” he said.

The Minister of Industry and Commerce, Mr Mike Bimha, could not be reached for comment.

Bureau VERITAS liaison officer for Zimbabwe, Mr Tendai Malunga, said his organisation was ready for the implementation of the CBCA programme.

“We have trained various stakeholders on the new programme and are ready to roll.

“Furthermore we have hired more staff in most countries to conduct inspections and various conformity tests on the various countries exporting goods to Zimbabwe,” he said.
Source: The Herald (Zimbabwe)