SA loses R5bn after Mozambique border post closure

The unrest in Mozambique has led to the closure of the Lebombo border post, costing truckers and the economy billions, according to economists and freight associations.

Residents of Mozambique took to the streets yesterday again, accusing the ruling political party, Frelimo, of rigging the votes in the national elections held last month.

Yesterday was the seventh day of the shutdown.

Mozambique riots hit home

Gavin Kelly, CEO of the Road Freight Association, said the freight industry had already lost close to R5 billion due to the disruptions to cargo from SA moving through the Mozambique port.

“We have no data on how many trucks are stopped at the border, but various authorities have advised transport companies should not attempt to cross into Mozambique. The border is closed from that side due to the authorities addressing the post-election disruptions,” said Kelly.

“This means trucks are stationary. The types of cargo can define whether there will be extended losses beyond penalties for late or no delivery.”

Economist Dawie Roodt said many firms had moved their export business to Mozambique. “South African harbours are a mess and lot of businesspeople have moved their exports to Mozambique because they are better than ours.

“When they cannot get their goods out of the border gate, it is a major concern. It is likely to affect the SA export business operating from that country”.

Roodt was also worried about the impact of the political instability of Mozambique.

“The protesting we see in Mozambique means our neighbour becomes politically unstable. That, in itself, is a major issue for SA. I hope it can be quickly resolved, otherwise it can have a negative impact on our economy,” Roodt said.

ALSO READ: Travel agents warn against travelling to Mozambique

Loss of revenue, damage to property on the cards

Another economist, University of Johannesburg’s Prof Peter Baur, said the situation would cause a loss of revenue, damage to property, infrastructural damage and, to a much broader extent, reputational damage, Baur said.

“The trade disruption is a huge concern, especially to border flows of goods, which affects the movement of fresh products and goods between countries.

“An overarching concern is the large amount of goods that come into South Africa from the Maputo harbour.

“Due to the delays in the Richards Bay and Durban harbours, many companies rerouted the transfer of goods via the Maputo harbour, which impacts upstream and downstream supply chains.

“These are mainly meant for both tertiary and secondary markets, which are used in both the manufacturing and trade in South Africa,” Baur said.

The Mozambicans’ lack of trust in the voting results might negatively impact investor confidence in the region and lead to investor uncertainty in the short run.

“This could result in a loss of income and trade across the region,” Baur said.

“Overall, this unrest could have a measurable impact on both the Mozambique and South African economies, particularly due to the spillover effects induced by the disruptions to trade.”

ALSO READ: Analyst calls SA to action on Mozambique stability amid Lebombo border closure

Economist calls for urgent solution

Another economist, Khaya Sithole, also called for an urgent solution as the two countries benefit economically from each other.

“South Africa benefits more in a sense that we are able to sell more to Mozambique than they are able to sell to us. Over recent years, as SA has its own logistic challenges, the access to the ports of Maputo for some SA companies trying to get their goods across has become increasingly important.”

A police officer at the border gate told The Citizen yesterday only a few vehicles were passing into Mozambique.

“It is still calm on the South African side, but on the other side, things are bad. The trucks and other commercial vehicles are not crossing,” he said.

A truck driver, Vusi Nkuna, who was in Maputo when the protest started, yesterday said he was lucky to be alive.

He had witnessed his fellow drivers being attacked by protesting people who also looted the goods that they were transporting.

ALSO READ: SA authorities on high alert after violent protests in Mozambique