THE rampaging Covid-19 pandemic has dealt a hammer blow to trade in the Southern African region due to limited movement of goods across borders in a development that has virtually left regional economies hamstrung, information obtained from five countries in the region shows.
Data supplied by revenue authorities from South Africa, Zimbabwe, Zambia, Botswana and Malawi paint a grim picture whereby there has been severe reduction in exports and imports, mainly due to stringent travel restrictions and border controls.
There has also been a serious reduction in the volume of goods in transit, leading to heavy revenue losses from import/export taxes and related levies.
Already, the regional economy, before the Covid-19 outbreak, was struggling to regain a broad-based recovery due to growing trade disputes among trading partners, falling commodity prices and economic uncertainties caused by political instability, among other issues.
Although South Africa, the region’s economic magnet, recorded six-month overall revenue surplus amounting to R63,07 billion (US$3,68 billion) to June 2020, the South African Revenue Service (SARS) told a regional weekly this week revenue from imports has plunged significantly in the past three months.
“SARS releases a comprehensive statement on trade statistics on a monthly basis. These statistics include trade data of trade with Botswana, Eswatini, Lesotho and Namibia (BELN). For your information, the year-to-date (January 1 to June 30, 2020) trade surplus of R63,07 billion is an improvement on the R4,74 billion (US$275,9 million) deficit for the comparable period in 2019.
Imports declined by 32,8% over the same period. The revenue statistics clearly indicate that Covid-19 has a significant revenue impact on regional imports.
Although there were signs of recovery in June, trade is still well below the norm,” SARS head of media and communications Sicelo Mkosi said in responses emailed to the Zimbabwe Independent this week.
The Zimbabwe Revenue Authority (Zimra) also said import revenue has been depressed because of the Covid-19 pandemic.
Zimbabwe, a landlocked country, relies on imports to sustain its economy.
“Although in nominal terms revenue collection continued on an upward trend with the authority managing to surpass its customs duty and other import taxes targets from January to June, Covid-19 has resulted in slowed growth in import tax revenue. April was the most affected month following the introduction of the first lockdown measures at the end of Mach 2020 where import tax revenue growth was lowest,” Zimra head of corporate communications Francis Chimanda said.
“The pandemic has had a very negative impact on regional integration and regional trade due to the different restrictions introduced by countries in response to the pandemic, however, bilateral and regional engagements have been taking place to ensure that cross border movements of cargo and limited travellers is done in a manner to ensure the safety of staff and travellers and also to minimise delays. There was a general 23% decline in commercial traffic flows through our ports of entry for the first half of this year when compared to the same period 2019.”
On the other hand, SARS said it has not experienced the same problems as Zimra in terms of regional integration because of its highly automated systems.
“SARS has not experienced noteworthy disruptions at our borders, except in the case of short-term port closures for decontamination purposes. The smooth continuation of services can be ascribed to the full staffing complement at our borders since the first month of lockdown, coupled with automated processes and clearance that is effected prior to arrival at a border,” Mkosi said. “SARS has furthermore created central coordination and trade engagement capabilities to effectively deal with issues as they arise, which, in the initial phases, culminated in trade engagements at a national level on a daily basis.”
The Zambia Revenue Authority (ZRA) also indicated that its imports revenue has taken a serious knock owing to the pandemic.
“Our revenue has greatly been affected but we are optimistic we shall recover,” ZRA public relations officer Topys Sikalinda said. “Our strategy is to shift focus to supporting the business sector to survive this pandemic. We are looking at the bigger picture in terms of revenue sustainability. Various tax laws have been adjusted, for instance the waiver on all penalties and interests for six months to all tax types except cases under litigation, determined cases by courts and fraud. Another is to remove excise duty on various items. Others are to do with removing taxes on specific suppliers and make VAT claimable on various input items.”
He also said the one-stop border post at Chirundu shared with Zimbabwe was greatly affected by the Covid-19 induced lockdown.
“Chirundu was affected and it created serious traffic, hence we started operating 24/7 and to increase staffing as a way to reduce congestion after the lockdown in Zimbabwe. This has generally affected supply chain but we have to adapt,” he said.
The newspaper last week reported that the pandemic negatively affected Botswana’s trade as it imported goods worth US$380 million in May against exports worth just US$24 million, with the trade deficit being the worst recorded since 2013.
Botswana mainly exports within the Sadc region where movement of goods and people remains restricted as part of Covid-19 containment measures.
Botswana attributed the trade decline to Covid-19 restrictions.
The World Bank forecasts that economic growth in sub-Saharan Africa will fall sharply from an annual average of 2,4% to as much as -5%.