By Juliet Matare (Customs & Excise and Trade Facilitation Expert)
INTRODUCTION
The Zimbabwe Revenue Authority (ZIMRA) plays a major role in trade facilitation at the several ports of entry in the country. This paper focuses on challenges faced at Zimbabwe’s largest and busiest border post in Southern Africa, the Beitbridge Border, as it tries to deal with Touts and Malayitshas. The paper also offers possible solutions that may be adopted to ensure the facilitation of legitimate trade in a secure environment for both traders and border officials.
Beitbridge is a border town in the province of Matabeleland South and in this town lies the Beitbridge Border Post and the Beit Bridge which spans the Limpopo River forming a political border between South Africa and Zimbabwe. This is the busiest road border post in Southern Africa with traders from all over Zimbabwe and others transiting further north to Zambia, Malawi and the Democratic Republic of Congo (DRC).
The area does not get much rain and residents rely on employment from the few hotels, restaurants, retail shops, clearing agents companies, banks, the railway company, police, immigration, ZIMRA, and a few others. Those who are not employed specialise in cross border trading as a means of survival. Beitbridge has also seen a number of migrants from inland towns to seek survival at the border.
Touts are the runners for smugglers who are well versed with border operations but survive on illegal processing of goods by dodging formal processes. Time immemorial, touts have been a challenge at Beitbridge Border Post where they are a threat to the State and the border officials. These touts have valid passports and at times identification cards issued by the Zimbabwe Revenue Authority after being registered as clearing agents as a way of protecting themselves.
Malayitshas, also known as Malumes, are couriers who import goods on behalf of Zimbabweans working in South Africa to their parents, relatives, or traders in Zimbabwe. When they are contracted, they charge courier fees which include transport, border clearance charges, and customs duties but they try as much as possible to evade Customs formalities so that they maximise as much as they can. This paper highlights the challenges faced by border officials as they try to facilitate legitimate trade at a post crowded with these touts and Malayitshas who on the other hand facilitate illegitimate trade. It also proposes recommendations to assist in taming
the border post and also limiting smuggling through unauthorised entry points.
TRADE FACILITATION IN ZIMBABWE
Following the growing dismantling of traditional barriers to trade, the world, Zimbabwe included, faced increased attention to the need to eliminate non-tariff barriers to trade. It also became visible that there was a need to address the issue of excessive documentation requirements for traders, inefficient border-crossing procedures, lack of automation and scarce use of ITC, transport, and transit impediments, lack of transparency and predictability, lack of cooperation and coordination and related negative impact on trade transaction costs, high and unjustified consumer prices, lack of competitiveness of products, and failure to utilise business opportunities. Trade flows were not efficient, there was no investment
coming in and Government was losing revenue through flouting of import controls and evasion of payment of duties. Zimbabwe joined the world in coming up with and implementing trade facilitation initiatives through its membership to the World Trade Organisation (WTO) and accenting the Trade Facilitation Agreement (TFA).
According to the World Bank (WB), one extra day in the clearance of goods at the border or inland port represents one percent of tariffs imposed where companies sometimes spend more money complying with Customs regulations than Customs earn in revenue. WB also says that traders face excessive documentary requirements with nine billion documents processed each year. Traders are confronted with a lack of transparency, duplicative processes, and lack of uniformity where they encounter differing requirements at different border posts in the same country. The WB indicated that on average, a single Customs transaction involves 20 to 30 different parties, 40 documents, 200 data elements, 30 of which are repeated 30 times, and rekeying of 60 to 70 percent of all data at least once. They say that time lost at borders accounts in some countries for 20 percent of overall transport time and that each day lost in transport delays is equivalent to a tax of about 0.5 percent.
Trade facilitation is supposed to benefit Zimbabwe through reduced transaction costs, increased customs productivity, improved trade tax collection, increased trade, and business opportunities, especially for SMEs and Informal-Cross Border Traders (ICBTs) with the government getting more revenue.
The WTO’s main basis of trade facilitation emanates from three General Agreement on Trade and Tariffs (GATT) Articles namely Articles V1, VIII2, and X3. Article V relates to freedom of transit where one should opt for the most convenient route without any discrimination and unnecessary delays and restrictions. Article VIII is for fees and formalities connected with importation and exportation and requires that fees should reflect the cost of services rendered, reduce any other kind of fees and simplify formalities and documents with minor penalties for minor errors. Article X calls for
transparency with the need for publication and administration of Trade Regulations promptly as well as provision for the right to appeal.
The Government of Zimbabwe, through the Ministry of Industry and Commerce, formulated a five-year Trade Policy for the period 2017 to 2021 to charter the country’s trade regime with the world. Trade Facilitation was identified as one key aspect in the policy document where initiatives to develop more one-stop border posts and reorganize the ports of entry were included. Also, ease of doing business reforms was identified through the government’s series of 100-day Rapid Results Initiative (RRI) programme which was aimed at increasing value-added exports.
In December 2013, WTO member countries concluded negotiations on a new agreement, the Trade Facilitation Agreement4 (TFA), at the Bali Ministerial Conference. In line with the decision adopted in Bali, WTO members adopted a Protocol of Amendment to insert the new agreement into Annex 1A of the WTO Agreement. The TFA provides for expediting the movement, release, and clearance of goods, including goods in transit, and also sets out measures for effective cooperation between Customs and other appropriate authorities on trade facilitation and Customs compliance issues. It also provides for technical assistance and capacity building on the trade facilitation provisions.
ZIMRA, as one of the major players in trade facilitation, put in place a number of trade facilitation initiatives which included the introduction of non-intrusive scanning equipment and canines, one-stop border post at Chirundu Border Post, use of electronic seals for cargo tracking, the introduction of the Green Route at border posts to facilitate travellers with nothing to declare or with goods within their duty-free allowances as well as the Authorised Economic Operator (AEO) facility which allowed express entry for AEO operators. They also introduced the pre-clearance facility.
Yes, these trade facilitation efforts are in place but these are there mostly to serve formal traders. An IMF study in 2019 showed that Zimbabwe has the second-largest informal sector in the world with only the South American Bolivia having a larger informal market. The study states that more than 60 percent of the Zimbabwean economy is informal, second only to Bolivia’s 62.3 percent. Informal traders trade mostly in imported goods and find themselves facing a very restrictive and prohibitive situation where they try by all means to maximise their profits by evading payment of duties and taxes through smuggling and non-formalisation.
BEITBRIDGE BORDER POST: CHALLENGES AND SMUGGLING
Challenges at Beitbridge worsened as the country went through an economic meltdown during the 2007-2008 hyperinflationary period which ravaged the economy and wiped away savings and pensions and also destroyed the Zimbabwe dollar. The hyperinflation between 2007 and 2008 forced many industries to close down or trim down where many lost their jobs. Even up to now when Zimbabweans are still recovering from the emotional and financial trauma experienced during that period, history seems to be repeating itself, as Zimbabwe regresses towards the 2008 catastrophe. Zimbabweans are experiencing more challenges as the country went through repeated drought periods compounded by the economic crisis characterised by acute shortages of foreign currency and runaway inflation said to be over 400%. According to the World Food Programme, Zimbabwe is now rated among the worst humanitarian crises in the world with close to 8 million people in both urban and rural areas facing food shortages.
The above challenges coupled with a high level of unemployment, have forced many Zimbabweans to resort to informal trade for a living as confirmed by the IMF study of 2019. Covid-19 also added to the country’s problems as its appearance halted trade, especially informal trade, with lockdowns affected globally. Zimbabwe relies on importations from South Africa mostly for grocery items due to a low industrial capacity utilisation as a result of a myriad of challenges like erratic power supplies, shortages of foreign currency to buy essential raw materials and retool amongst others in order to meet its domestic demand.
Also included among the challenges are the multiple import controls imposed by the government of Zimbabwe through uncountable Statutory Instruments (SIs) including the famous SI 64 of 2016 which restricted and prohibited the importation of a wide range of goods and led to riots by informal traders and the burning of a State Warehouse at Beitbridge Border Post. The causal effects of this particular and other SIs worsened the trading situation which saw an increase of touts and the informal transporters (Malayitshas/ Malumes) at the border post.
The Touts, who will be holding valid passports, are famous for facilitating smuggling where they are based inside the border post, on the no man’s land between the South African and Zimbabwean sides of the border. They even have fake date stamps where they can issue documents like the Temporary Import Permits (TIPs) for vehicles, Affidavits purporting to be foreign vehicle owners, and authorising drivers to facilitate the issuance of TIPs to non-qualifying vehicles which will have been permanently
exported from South Africa for permanent importation into Zimbabwe. These vehicles would then come in as tourist vehicles and disappear into Zimbabwe without duty having been paid. The Touts also facilitate the smuggling of goods where commercial goods are split into smaller consignments which “qualify” under the travellers’ rebate and import them without payment of duty. The consignment is then reconsolidated after being smuggled in and the informal trader proceeds with the goods to inland destinations/markets. In a 24-hour day, one Tout can import goods several times, minimum being three times under the three different ZIMRA shifts to avoid detection, utilising his/her rebate without ZIMRA noticing as no record is kept after a traveller has utilised the rebate.
In a report by the Standard Newspaper of 13 January 20197, a traveller was left stranded after his car, a 2018 Toyota D4D twin cab on hire purchase in South Africa, had been seized by ZIMRA for a fake TIP. In reality, the traveller, explained that some middle-aged smartly dressed “customs clearing agent” who offered to do his import papers and charged him US$200 was the source of his misfortune. The newspaper blamed this on the presence of plainclothes officials placed inside the Beitbridge Customs and Excise yard to deal with Touts who had invited undesirables like pickpockets, thieves, conmen and all types of criminals into the Customs Yard who pretended to be officials. The traveller was quoted as saying, “The guy told me he worked with the Department of Customs and he would now and again go to the counters and come back with a smile and results, good results. He was fast and friendly, too smooth to be unreal,” The newspaper report confirmed that almost every holiday, dozens of unsuspecting travellers fall to this trick by these Touts also known as maguma-guma prowling the border post day and night.
The Malayitshas/Malumes also join in the smuggling where they employ the Touts who declare the goods as theirs and help the Malayitsha driver to get the goods out of the Customs Area. Once out of the border, the Touts are paid and they go back into the border post to assist another Malayitsha. The Malayitshas get orders from clients in inland destinations who give them money for their orders in advance or they are given goods mostly groceries and small electrical items like stoves, refrigerators and television sets, by Zimbabweans working in South Africa to deliver to their relatives, parents or buyers in Zimbabwe. Informal traders operating tuckshops in Harare, Bulawayo and other towns also utilise these Malayitshas to import goods.
At times the informal traders troop to South Africa to buy their wares and use these Touts to smuggle their goods and pay them for the smuggling service after which they proceed to their various destinations all over Zimbabwe.
The Limpopo River has always been an option for smugglers where the Touts take advantage of the low water levels to create illegal crossing points in the winter and spring seasons. The informal cross border traders hand over their goods to the Touts on the South African side of the border. The Touts then smuggle the merchandise through these illegal crossing points and then team up with the traders in Beitbridge Town to receive their payment in exchange for the smuggled loot. The traders and their goods are then ferried mostly by local buses to their intended destinations. A number
of buses and other vehicles have also been seized by ZIMRA for ferrying uncustomed imported goods as per Section 187 of the Customs and Excise Act.
This perennial practice continues unabated because the daring Touts are aware that ZIMRA or any of the security agents have no capacity to do border patrols and they take advantage of that were even loaded 30-tonne trucks have been crossing through the dry riverbed of the Limpopo River where a tent or tents are laid over the sand to protect the trucks from getting sucked and stuck in the sand or mud. Agricultural tractors have also been seen facilitating smuggling by towing Malayitsha vehicles across the Limpopo River.
Video clips and photographs of these smuggling activities at illegal crossing points circulating on social media bear testimony to the rampant illegal activities along the stretch of Limpopo River. This is even happening now during the Covid-19 lockdowns where, due to closure of the border post, informal trade has shifted to the Limpopo River, risking and throwing open the unrestricted importation of Covid-19 and its spread in Zimbabwe outside the control and knowledge of the Health authorities. In addition, the smugglers risk life and limb by wading and crossing the crocodile and hippopotamus infested river.
A report in the Herald of 14 June 2016, exactly four years ago, indicated that ZIMRA was largely to blame for the chaos at Beitbridge Border Post. The report said that people visiting ZIMRA offices and Ports of Entry across the country were welcomed by banners at the reception inscribed “We Are Here To Serve” and workers wearing T-shirts inscribed “I am not corrupt’’ where it said this psychologically prepared the visitors for an on-the-dot type of service, which sadly, was yet to be witnessed since ZIMRA’s inception in 2001.
The paper went on to write that besides displaying those motivating messages, travellers concurred that ZIMRA had become a nightmare for importers and exporters because of the treatment they got at the country’s border posts, especially in Beitbridge.
From what is happening along the Limpopo River, it is evident that the country’s national security is also threatened as enemies the state can easily infiltrate borrowing a page from the daring illegal crossing activities of the smugglers. Besides the usual goods, arms can also be easily smuggled in through those activities. The same modus operandi could also be used in the reverse process as getaway routes for fugitives from justice from either country.
Last but not least, human trafficking and border jumping of illegal immigrants are added challenges thriving under the laxity of tight border control and management along the Limpopo River in particular and borders in general.
WAY FORWARD
As a way forward, Zimbabwe needs to incorporate a number of initiatives to rescue the situation as well as the illegal importation of goods through the Beitbridge Border Post and the Limpopo River.
Already ZIMRA has gone far in simplification and streamlining of procedures, reduction of requirements and processes, harmonization, non-discrimination, enhancing coordination and cooperation with other border authorities including the
South African Revenue Service (SARS). They have also tried to enhance transparency and predictability through the implementation of the TFA but a lot needs to be done to consolidate these efforts and encourage voluntary compliance. Some strategies could be short term and others long term.
On the Limpopo Riverside, a joint permanent border patrol unit should be put in place and operate 24 hours. It should include ZIMRA, Immigration Department, Zimbabwe Republic Police, Zimbabwe National Army, and National Parks Authority. ZIMRA alone cannot handle the daring smugglers who can be armed and harm ZIMRA officials if they go it alone. The other option is to train ZIMRA officials and ensure the team that patrols the border is armed. The team needs to be equipped with relevant resources like rough terrain four-wheel-drive vehicles and drones for remote
patrolling. Stiffer penalties should be put in place where perpetrators should even be prosecuted and be given custodial sentences. Currently, the smugglers get caught, pay the fines which to them are affordable and they go back to do their smuggling business.
At the border, there is a need to have different lanes to cater to the different types of traffic and ensure the issue of loitering is avoided. The commercial office should be moved out of the border so that Touts do not take advantage of pretending to be clearing agents doing commercial business.
Another solution for the Beitbridge Border Post is to adopt a Free Zone concept where the whole of Beitbridge is placed in a Special Economic Zone where it is geofenced physically and electronically. Entry at the border post will be unrestricted and anything imported into the free zone will be free. There will not be any need to even clear the goods through Customs. Clearance will only be required where the goods are moved out of the free zone and Customs will have one gate at the outskirts of Beitbridge where they will check if the relevant clearance has been done and the duties have been paid.
Residents of Beitbridge will have the privilege to import anything they want from South Africa for their own use or even trading amongst each other
within the zone. On the commercial side, registered companies will operate by importing raw materials, manufacturing products, and exporting them. These zones also referred to as export processing zones offer warehousing, storage, and distribution facilities for trade, transhipment, and re-export operations.
According to the World Bank, “an export processing zone is an industrial estate, usually a fenced-in area of 10 to 300 hectares that specializes in manufacturing for export. It offers firms free trade conditions and a liberal regulatory environment. Its objectives are to attract foreign investors, collaborators, and buyers who can facilitate entry into the world market for some of the economy’s industrial goods, thus generating employment and foreign exchange.”
Under the WCO, the International Convention on the Simplification and Harmonization of Customs Procedures commonly known as the ‘Revised Kyoto Convention’ (RKC) formally defines and procedurally regulates Free Zones in Specific Annex D, Chapter 2. The RKC defines a Free Zone as “part of the territory of a Contracting Party where any goods introduced are generally regarded, insofar as import duties and taxes are concerned, as being outside the Customs territory”.
This means that the whole area will not be controlled by ZIMRA as it will be considered a foreign land. ZIMRA will only be concerned with goods exported from the territory. The Free Trading Zone will be an advantage to the town, the district and the country as it will provide labour, export growth, export diversification, foreign exchange earnings, foreign direct investment, and increased government revenue.
A Port Authority would be another option and would help alleviate some of the challenges being faced at Beitbridge and other border posts allowing ZIMRA will concentrate on their core business while the Port Authority concentrates on border protection and security issues. This has worked at the airports where there is the Civil Aviation Authority of Zimbabwe (CAAZ).
If there is genuine political will, Beitbridge can be sorted out and become tame like other border posts in the world. If other even bigger border posts can easily be managed, nothing can stop Zimbabwe to effectively and efficiently manage Beitbridge Border Post.
Regionally and continentally, if the objectives of the Regional Economic Communities and those for the African Union through the African Continental Free Trade Area (AfCFTA), the challenges being faced by Beitbridge will be a thing of the past.
Overall, what is required is for Africa to integrate trade, have the relevant regional infrastructure, be integrated production-wise, allow free movement of the African people in Africa, and have financial and macroeconomic integration.
If all these are achieved then we will have in place regional and continental economic infrastructure, we will foster food and energy security, we will generate jobs for Africans including its teeming youth thereby alleviating poverty and promote inclusive growth through appropriate industrialisation.
Disclaimer: All views and opinions expressed in this article are those of the author(s) and do not necessarily represent the views of the Zimbabwe Institute of Certified Customs and Excise Experts Trust. Readers are encouraged to quote and reproduce this material for educational, non-profit purposes provided the source is acknowledged.
Juliet Matare is a Customs & Excise and Trade Facilitation Expert with 35 years’ experience and a trainer for Customs & Excise Law and Procedures, Trade Facilitation, and National Trade Facilitation Committees. She holds an MBA Degree in Customs Management from the University of Canberra, an MSc Degree in HR Management from the Midlands State University, Bachelor Degree in HR Management from the Zimbabwe Open University, a certificate and diploma in Computer studies from CITMA College in Harare and an International Computer Driving License. Juliet is a certified and accredited trainer under the UNCTAD WCO Empowerment Program for National Trade Facilitation and she participated in the WTO National Assessment of Trade Facilitation Needs & Priorities for Zimbabwe twice. She enjoys positive involvement in Trade and Trade Facilitation issues. She can be contacted at julietmatare@gmail.com or on mobile +263 772403730.