Workshop Magazine Regional Integration, Johannesburg, South Africa

NEW AFRICA A DW AKADEMIE WORKSHOP MAGAZINE

JULY 2013

INSIDE TRADE

MIRACLE ONE STOP BORDER POST

BUSINESS

WHEN SENDING MONEY TAKES AGES

BORDERS

WE ARE ONE I dream of the realisation of the unity of Africa, whereby its leaders combine in their efforts to solve the problems of this continent. I dream of our vast deserts, of our forests, of all our great wildernesses

- Nelson Mandela

RAILWAY TO BENEFIT SWAZIS?

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ON THE BORDER

MIRACLE ONE STOP BORDER POST Chirundu sets the pace Text ANGELA CHISHIMBA PHOTOS BORDERSPOT

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ambia has made it easier to carry goods across its border but other southern African countries are struggling to do the same.

“We have spent four days in the cold waiting for our goods to be cleared,” said Malawian business woman Chifundo Phiri, whose main income comes from selling blankets.

The 29-year-old buys the blankets in South Africa and resells them in Malawi. She has been trading for the last two years but has not seen any change in customs procedures at Mwanza border post between Mozambique and Malawi.

“There are so many unnecessary forms that we are filling before our goods are cleared and each time I pass through this place, it’s like more forms are being introduced,” Phiri complained.

It’s a different story at Chirundu border post between Zambia and Zimbabwe. Chomba Nambule is a teacher at a private school in Lusaka and also sells clothes to make ends meet. She buys them in South Africa and crosses the border once a month.

“At least we do not have to wait for days for our goods to be cleared because we only stop once either way,” she said. Nambule said there has been a great improvement in the clearance of goods since the one stop border post (OSBP) was introduced at Chirundu in December 2009.

The OSBP has brought together customs officers from both Zambia and Zimbabwe who now operate in one place.

This way it is easier and faster for traders to clear their goods as they only make a single stop instead of having to clear customs on both sides of the border as was the case previously.

The traders also fill in a simplified form unlike in the past when there were many complicated forms.

As well as reducing the amount of time that it takes for people and goods to cross borders, the unified crossing also makes it easier for customs officers on both sides of the border to share information. This reduces fraud and corruption as well as helps to uncover smuggling and criminal activity.

One stop border posts are

probably the single most important step towards regional integration and trade liberalisation according to Andreas Kuenne, the Economic and Global Issues Minister at the German Embassy to South Africa.

At the moment though, Chirudu is the only such border post in operation. However, governments across the Southern African Development Community (SADC) are looking to Chirundu for inspiration.

The Malawian government, for example, has said it will also introduce one stop border posts.

The Ministry of Industry, Trade and Private Sector Development has prepared a document proposing the need for simplified border procedures which has been presented to Cabinet for approval.

“We are not sitting idle. We are also discussing with our neighbours on the need to introduced a one stop border post,” the Ministry spokesperson Wiskes Mkombezi said.

It has however not been easy for other SADC countries to introduce one stop border posts due to lack of political will by African leaders.

BORDERS ARE A BLOCK TO BUSINESS Text KUDZAI CHIMHANGWA AND EMMANUEL LUCIANO

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he floor of the DHL warehouse in Johannesburg is a hive of activity as forklifts criss-cross the floor hauling palettes stacked with boxes.

For the forklift drivers, ferrying freight is all part of a day’s work for the international logistic company at South Africa’s OR Tambo International Airport cargo centre.

DHL International Customs Affairs Manager Dave Perumal shouts over the sounds of the forklifts as he explains the hurdles DHL face in carrying cargo across borders in Africa.

“This is basically a transit facility, there isn’t supposed to be any stuff sitting in here,” he said pointing to a whole wall of boxes and cartons awaiting customs clearance to other African countries. This warehouse is evidence of an inefficient clearing process. It’s all here because of

customs,” Perumal said.

From filling in forms in triplicate on both sides of the border, to uncertainty about quantity of goods and staffing problems, there are many challenges to moving goods across the borders of countries belonging to the Southern African Development Community (SADC).

Lengthy customs procedures result in delays in clearing goods and clogs warehouses such as here.

Currently, 80 percent of DHL’s cargo leaving South Africa bound for other African countries is carried by air. This is about four times more expensive than transporting goods by road.

But, Perumal said, the customs clearances at border crossings are just too slow to move more goods on trucks.

For well over five decades, regional integration has been

part of the African continent’s broad strategy for economic transformation. According to the African Development Bank, intraAfrican trade in 2009 accounted for about 10 percent of the continent’s total trade. This is way below the levels of intra-regional trade achieved in Latin America and Asia standing at 22 percent and 50 percent, respectively.

Trade analysts say the lengthy procedures for clearing goods at border posts could be addressed by the introduction of comprehensive automated systems for document checking and clearing.

Most southern African border posts do not use modern information technology in domestic and international trade. The exceptions are South Africa, as well as Zambia and Zimbabwe’s one stop border post of Chirundu.

Although South Africa has been rolling out its e-filing system since 2006, this has not resulted in faster customs clearances within SADC as the technological systems of other SADC countries are not compatible.

“Africa should invest in technology,” said DHL Director of Customs and Gateways Gerard St Maria.

Sta Maria is an experienced manager who has worked for DHL in Australasia for more than ten years.

“The SADC region can learn from the speed at which Asia makes changes,” said Sta Maria.

The Association of Southeast Asian Nations (ASEAN) has attempted to improve customs coordination through the implementation of the ASEAN Single Window project. This permit importers to submit all information related to the transaction to be

entered electronically at one time.

This information is then shared with all other ASEAN national customs authorities.

Ironically, customs clearance of cargo from Asian countries to SADC countries is faster than that for cargo originating from other African countries. According to the International Trade Centre, it takes 91 days to comply with all trading requirements for intra-regional SADC trade, compared with between 53 and 60 days for trade between SADC and other markets outside the region.

“There is basically no alignment of policy between SADC states.

Transportation weights applicable in one country are not applicable in another. There is need for discussion, development of best practices and political will for this to work out,” said DHL’s Sta Maria.

ON THE STREET

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PUSHING FOR CONTRACEPTIVES South Africa confronts teen pregnancy Text MAJIRATA LATELA PHOTOS STREETWISE

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thabiseng does not seem bothered with the high rate of teenage pregnancies in South Africa as she and her friends leisurely prance down the streets of Auckland Park in central Johannesburg.

She is even comfortable talking about contraceptives saying she is always careful to use condoms whenever she is having sex. A first-year student at Johannesburg University, Nthabiseng had her first sexual experience when she was 19.

However, it was a different story on the other side of the road where a group of boys said they do not like using condoms. Mike and his friend said if they use condoms they wouldn’t enjoy sex.

These are all typical South African teenagers. According to statistics

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iney Sithole, a sex worker from Zimbabwe, operates on the streets of Joburg. She makes use of a deserted building, located close to one of the banks in the central business district, to service her clients. Clad in an eye-catching mini-skirt, she said most of her clients insisted on unprotected sex.

“Sometimes we become victims of violence because some clients physically assault us when we insist on protection,” she said.

Sithole does not know her HIV status and is terrified going to the clinic because of the many times she has had unprotected sex, which she knows is a major driver of HIV and AIDS. “Sometimes if a client insists, I agree to have sex with them without using protection because I do not want to be hurt although I know having intercourse without a condom is risky,” she explained.

Sithole came to South Africa three years ago but when she could not find a decent job, she decided to turn to one of the oldest professions prostitution.

“This is not an easy job but I have no alternative because it is the only means of support I have for my baby and family back in Zimbabwe,” she said.

Her knowledge of sexually transmitted infections is limited to what she has heard from friends and seen on television.

Sophie Mofokeng from Lesotho also walks the streets, which she

from the South African Health Ministry, most teens start having sex at the age of 15 and that one out of three girls become pregnant before the age of 20.

Unprotected sex and lack of use contraceptives is a problem in South Africa, resulting in high teenage pregnancies and infection of HIV and sexually transmitted diseases.

The situation has had very adverse effects on youth education as many of them drop out of school after becoming pregnant. This subsequently affects their future prospects as they end up doing menial jobs to survive because of lack of education.

Teenagers in South Africa with low education and who come from low socio-economic backgrounds are less likely to use contraceptives according to Gender Links, which

examine reproductive health as part of an annual gender barometer.

According to a report produced by the reproductive health NGO, Bio Med Central, although 97 percent of women between ages of 15 and 49 have heard of at least one contraceptive method, this doesn’t translate to teenagers actually using condoms or going on the pill.

The Bio Med report attributed the low usage of contraceptives among young women to the fact the most women do not know exactly how to use contraceptives or which contraceptive method would suit them at a particular time.

It also says another push factor for high teenage pregnancy is the pressure to ‘prove their love’ through demonstrating their fertility by child bearing.

However, the South Africa

government is not just sitting idle on the matter. A number intervention programmes have been put in place to promote contraceptive use as one way of reducing teenage pregnancies.

Mpilonhle, a non-governmental organisation, advocates the use of contraception among the youth and runs sex education projects in schools and communities.

Thandi Mashona, a representative of Mpilonhle, says Mpilonhle conducts individual consultations where students speak privately to the counsellors. This encourages the youths to freely talk about their sex life without feeling ashamed. The NGO also distributes condoms and pills during awareness campaigns in schools and mobile clinics.

She says most youths respond positively to the counseling offered by the organisation. There is reason

PROSTITUTION DRIVES HIV Text SMANGA KUMALO says exposes them to HIV and other sexually transmitted diseases because they are less protected than prostitutes working in a brothel.

“We do not have people looking after us like those who operate in the hotels. We have some incidents where colleagues get raped without condoms. We cannot report these incidents to the police because this business of ours is illegal,” she said.

Stephen Ngcobo, the Gauteng Province coordinator for Treatment Action Campaign (TAC) said prostitution plays “a major role in contributing to HIV/AIDS”.

South Africa’s HIV prevalence rate is 17 percent amongst those aged between 15 – 49 years. It is estimated that 20 percent of all new HIV infections in South Africa occurr among prostitutes.

Ngcobo said there were several problems in getting the message accross about the necessity of safe sex.

“We as TAC try our best to educate people about HIV/AIDS

in the community but one of our challenges is that we cannot reach brothels to teach sex workers about HIV/AIDS because of certain restrictions by the owners of the brothels,” Ngcobo said.

He added that even if the prostitutes were aware of the dangers of unprotected sex, this didn’t always protect them from HIV/AIDS because they were often raped.

He said prostitutes from other countries shouldn’t be ashamed about seeking out testing or treatment for HIV/AIDS in South Africa.

“Our constitution says everyone is entitled to treatment despite which country you come from. Even those come to South Africa illegally deserve access to treatment,” Ngcobo said.

He added that migrants are allowed to take their treatment with them when they go back to their home countries for a visit.

Ngcobo also called on health

to believe the situation is being reversed if current statistics are anything to go by.

The SADC Gender Barometer shows that in 2007 South Africa’s rate of using contraceptives for women aged between the ages 1549 was at 52 percent. But in 2012 a considerable progress was made as now 60 percent women use modern contraceptives.

According to the Barometer, although South Africa still has a way to go, there are other countries in the SADC region that are struggling.

Angola and DRC have extremely low contraceptive use percentages of six percent and five percent respectively.

If SADC countries started seriously implementing the programs contained in the gender protocol, the situation could improve however.

clinic staff to treat prostitutes who come for HIV testing or treatment with respect.

“Some HIV positive sex workers do not report to clinic because they do not have legal papers and they feel harassed by the staff nurses,” he explained.

Thembelihle Mxotwa, a health educator at Joubert Park Clinic, said his institution was open to all.

“We offer treatment to anyone that deserves a treatment. We do not discriminate,” he said.

Mxotwa said they offer two to three months treatment supply to migrants who temporarily leave South Africa.

He said there are people from the neighboring countries such as Zimbabwe, Zambia, Namibia, Lesotho, Democratic Republic of Congo that come to the clinic to receive treatment.

According to Desmond Tutu HIV foundation, HIV prevalence for migrant groups is lacking, a recent study that targeted migrant farm labourers found that between 38 and 60% of participants were cross border migrants, where HIV prevalence was documented to be 28–49%.

According to Marlise Richter, an expert from Witwatersrand University, In 1998 AIDS epidemic has found that sex workers had a HIV prevalence rate that was more that 3x higher than the prevalence rate of that segment of the general population.

POLITICS

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‘GAME OVER FOR MUGABE’ New Africa interviewed Roy Bennett, the treasurer for the Movement for Democratic Change, on elections and politics in Zimbabwe New Africa: We are a week away from election day. What should be done to ensure that they are fairer than the previous one?

Roy Bennet: According to the observers, it was an illegitimate election in 2008. We are going into an election endorsed and facilitated

by SADC. They guaranteed free and fair elections. That agreement has already been broken in many ways. What presents a problem in these elections is the duplicity, lack of transparency and the lack of a commitment by politicians who make agreements and don’t honour those same agreements.

NA: Why does the MDC-T keep on referring to SADC yet your party knows that there are Mugabe sympathisers in the regional body?

RB: SADC guaranteed the government of national unity. We are entering into elections now because it’s a SADC brokered process with a SADC appointed facilitator.

This means the regional body is responsible and accountable for the elections. It’s up to the people to claim their space. It’s game over for ZANU-PF, it’s game over for SADC. The people of Zimbabwe are going to embarrass them all hugely by demonstrating their will democratically NA: Why is the opposition in Zimbabwe not uniied?

RB:We are not the opposition, we are the ruling party and we hold the majority of seats in parliament.

There is major unification of all forces opposed to the Mugabe regime, there is only a minority with Welshman Ncube (MDC) and Dumiso Dabengwa (ZAPU), who for personal reasons have taken their personal agendas before the national agenda. But a united front can bring democracy to Zimbabwe. We have had a very serious approach from the ZAPU leadership. They will disown Dabengwa and publicly say that they are part and parcel of the unity of Zimbabwe.

NA: So do you think Tsvangirai could win the elections?

RB: Zimbabwe will never be the same again. It will be a landslide victory for the MDC and the presidential candidate Tsvangirai. I believe this (result) will be accepted and we will move on to the next stage to the evolution of our country.

I honestly believe if the election should be rigged, the people of Zimbabwe are not just going to sit on their hands and accept it as they have done for the last 13 years. I see Zimbabwe moving into an ungovernable state should the election be stolen.

Tidbits: Roy Leslie Bennett oy Leslie Bennett, 56, is the treasurer of the MDC-T. He has been living in exile in South Africa since 2010.

In the late 70s, Bennett served as a member of the British South Africa Police and later ventured into farming business, as a third generation Zimbabwean.

In 2000, he was elected as a member of the house of assembly representing the Chimanimani constituency. In Zimbabwe Bennett is popularly known as Pachedu, which means ‘between us’.

He lost his farm to farm invasions and his family was attacked before moving into exile. In 2009, despite being appointed Deputy Minister for Agriculture in the inclusive government, he was arrested and detained for 15 months.

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NA: You live in South African exile and you are the party treasurer, how do manage this?

RB: I believe because I’m the treasurer is one of the reasons I have been targeted (by Mugabe’s regime).

Having been honoured by the people

of the MDC to be elected in as treasurer general, it’s a key role to raise resources and place the party in a very strong position for elections.

I can’t be in Zimbabwe. This is because they will arrest me again if I go back. This persecution comes

down to my role as the treasurer of the party and the fact they are blocking any funding to mobilise the people of Zimbabwe through the Political Parties Act. As long as I’m in Zimbabwe, they are going to arrest me, kill me,

do whatever they want to me. It’s terrible to be in exile, it affects your family and life but it’s a sacrifice one has to make for what one’s beliefs are. Zimbabwe is my home and I will come back when the MDC-T is in power.

GOODBYE EU MODEL Text EMMANUEL LUCIANO

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he Southern African Development Community (SADC) has a very strong case for pushing for economic regional integration fashioned on the European Union (EU) model, but the wholesale adoption of the Eurocentric model would be suicidal.

Economic regional integration in Europe has been credited with successfully fostering free movement of people in the region, ensuring adherence to uniform standards, increasing wealth, stabilising a continent previously torn apart by war, and propagating a common mindset.

Superficially, the SADC region appears justified in copying the European model to achieve the same results but unfortunately, it is doing so without considering

historical, political, cultural and economic factors of the region.

Sadly, southern African leaders do not have the political will to share sovereignty as did their European counterparts, nor do they have the desire to share common institutions such as border posts to promote the free flow of trade.

With most of the 15 countries in SADC having attained independence as recently as two decades ago, most leaders still selfishly guard their national interests and cannot commit themselves to regional protocols that encourage solidarity, for fear of losing their autonomy.

When the EU was founded, it had, and still has, a strong and widely spread manufacturing base.

However, the situation in southern Africa is completely

COMMENTARY different. Seven out of the world’s least developed countries are SADC members, leaving the region with a weak productive capacity, as it largely depends on subsistence farming and extractive commodities that are not value added.

While the influence of strong economies such as Germany, France and the United Kingdom has been central in pushing the Euro zone agenda, the SADC region remains at best fragmented. South Africa is the only country in SADC with a capacity to advance the

regional economic agenda but it continues to play a peripheral role.

The domestic agenda still limits the African National Congress (ANC)led South African government from influencing the region as it has to address local challenges such as high levels of unemployment currently at 25 percent.

The overlapping of economic membership by some SADC countries is also undermining the adoption of the European model of regional integration. Various SADC members belong to the Common Market for East and Southern Africa and the East African Community which have different ideals and goals than those of SADC. Southern Africa, therefore, needs to craft its own model and borrow from Europe only those

principles that can work such as trade liberalisation, harmonisation of industrial policies, creation of one stop border posts, liberalisation of the movement of people and reducing dependency on commodities. The model should also accommodate informal trade which could help spur economic growth in the region.

The success story of the Southern Africa Customs Union (SACU) comprising South Africa, Namibia, Botswana, Swaziland and Lesotho, demonstrates that a free trade union and a customs union can work well in Africa.

However, a SADC monetary union with its need for fiscal controls, a central bank, strong institutions and political consensus is doomed for failure.

TRADE

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udu Fakudze is an informal trader in Swaziland who buys clothes and cosmetics from neighbouring Mozambique and sells them at Lobamba about ten kilometres from the Swazi capital of Mbabane.

Twice a month she travels to Maputo to buy her stock. On her return to Swaziland, she faces the tedious process at Mhlumeni border post of dealing with customs officers.

“Swaziland Revenue Authority (SRA) officials are corrupt and they frustrate us so that we pay bribes,” said Fakudze.

Mabhawodi Dlamini, president of Phandzelumntfwana Association, an association that convenes the informal traders to purchase stock outside Swaziland, said most informal traders have difficulties with customs officials.

“There is always insufficient SRA staff at the borders and traders

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Swazis at the mercy of corrupt officials Text PHATHIZWE-CHIEF ZULU PHOTO MUNTU VILAKAZI spend up to six hours waiting to declare their goods and be cleared by the customs department,” said Dlamini. He also said that some problems occur because the traders don’t understand the differing rules and regulations.

For example, when bringing in goods from Mozambique into Swaziland, traders were charged customs duties as well as sales tax.

However, traders importing goods from Johannesburg do not have to pay duties on their goods because South Africa and Swaziland are both part of the Southern African Customs Union.

Imported goods from South Africa only incurred a charge 14 percent VAT on the value of the goods.

But getting the traders and customs officials to agree on the value of the goods was difficult at times.

“Some hawkers buy their wares from street vendors in South Africa who don’t issue receipts. The SRA officials refuse to accept the prices offered by the traders and want to determine their own prices,” Dlamini said.

Fakudze and hundreds of Mozambican and Swazi traders like her also have trouble with Swazi soldiers who stop them along the road and demand receipts to determine if they have paid the correct amount of tax.

“Whether it’s raining or not, we have to offload the minibus so that

they also check our goods,” Fakudze said. SRA Communications Officer Vusi Dlamini said the customs had attempted to speed up the process and make it fairer.

According to the official tariff book, second-hand clothing being imported into Swaziland from Mozambique should be charged at R25 per kilogramme plus 14 percent VAT. This means a 10kg bale of clothing worth R100 would be charged R250 for duties and R49 for taxes.

“This then requires that all second hand clothing be weighed and these duty and tax rates be applied,” explained Dlamini.

The SRA has now agreed to charge a flat rate of R3 per item

which includes duties and taxes.

When questioned by New Africa about corruption allegations, Dlamini defended his officers, saying the authority has an Internal Affairs Division whose responsibility is to investigate allegations of any form of unethical behaviour by staff so that appropriate action may be taken.

“Since inception in 2011 the SRA has processed many such cases and some have even been concluded with dismissals,” he said.

Dlamini stated that his organisation has zero tolerance for any form of corruption and urges the public to assist on this endeavour by reporting through a toll free line 800 8000.

“This number can be called through both landlines and mobile phones. The whistleblower need not give us their personal details but must be prepared to give us as much information as will assist us to conclude the reported case,” he said.

‘SADC LACKS POLITICAL WILL’ Text MULISA SIMIYASA

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he 15 countries that make up the Southern African Development Community (SADC) have a fixed roadmap for implementing a dense economic and political integration of the region. They want free trade, a customs union, a common market and a single currency by 2018.

But they are far away from achieving their agenda. New Africa talked to Peter Draper, a trade expert and Senior Research Fellow at the South African Institute of International Affairs.

What is the reason for the gap between the paper agenda and the reality?

SADC has a broad mixed agenda. Its political agenda will take a long time to implement as it is vast. The economic agenda alone is a copied model of the European Union, and it is not easy to implement in SADC. Its

political agenda on the other hand carries a lot of problems such as lack of political will of individual member states, security and sovereignty.

They are failing to surrender their sovereign powers.

Can you explain this with an example?

The practical example on the political will is the challenge facing SADC on the election situation in Zimbabwe. Zimbabwe will have elections next week and Robert Mugabe, the President of Zimbabwe, already told one of the South African negotiators to stay away from his country’s political affairs. That comes back to the issue of sovereignty, whereby Zimbabwe’s political issue is a SADC problem that is supposed to be dealt with regionally. But SADC lacks the political will to enforce any political pressure on Mugabe or a solution for Zimbabwe.

What exactly do you mean by political will?

Having the political will could mean if you say you will do something, you will have to back it up with the will power. But what often happens in meetings of the SADC Heads of State is that they will say we are going to create a monetary union for SADC, for example, yet they don’t really mean

that. SADC’s political leaders are not serious with what they say in meetings because they all want to keep sovereignty – and no politician willingly gives up power.

Why is sovereignty so important to the SADC member states?

Because sovereignty is the mighty foundation of politics. Sovereignty is the power to make decisions, so if they give up key areas of economic policy making, then they lose individual sovereignty. However, regional integration involves political sacrifice with one ultimately hoping for economical gains.

Would you say SADC is weak in its regional integration?

The SADC member states are pursuing a model – Free Trade Agreement- Customs UnionCommon Market- Monetary Union – which is not really right for their regional economic integration. Some aspects of the model are fine but in total it is a model for Europe, for the previous era of the European Union.

The EU-model is not appropriate for SADC based on its unique colonial history, and its current political situation.

Is there a positive example where SADC has worked together to

simplify trade?

The good example of simplifying trade here is that of the Chirundu One Stop Border Post situated between Zambia and Zimbabwe on the Zambezi River where the custom excise and immigration procedures are harmonised and where it is relatively easy and fast to process travelling documents. However, there are challenges associated with that establishment related to political ownership of the place.

In conclusion, how could SADC become a success story?

The Southern African Power Pool could be the way for SADC to become a success story. It is a cooperation of SADC national member state’s electricity companies created to be a common power grid between member countries and a common market for electricity within the region founded way back in 1995. This SADC power pool utility had been working well for the past years, aiming at reducing operational costs of electricity generation, and maximising electricity supply and reliability amongst members. The principles are clear and attainable. However, I am not so sure how effective it is working currently but this has been a good initiative.

BUSINESS AND FINANCE

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llen Malimbasa from Malawi is a migrant worker in South Africa where she looks after children. Although her job as a maid is not lucrative, she supports her two sisters back home.

However, getting her money back to Malawi is both difficult and costly.

Today Malimbasa is at Park Station to look for the bus driver she always uses to deliver money back home.

It needs to arrive in time to pay the university fees of one of her sisters.

Park Station is the biggest commuter terminal in South Africa with buses leaving for countries all over southern Africa, including Zambia, Malawi, Zimbabwe, Mozambique and Botswana.

Malimbasa says the major problem with entrusting money to a bus driver is that they charge exorbitant fees for delivering the money. “The drivers are making a killing out of our hard earned savings because they charge R25 for every R100 we send which is too high,” she said.

She says her money normally takes three days to arrive in Malawi, but sometimes takes even longer.

“Sometimes the bus develops problems on the way and that delays delivery of the money.”

Sipi Chavula is one of the bus drivers who commutes to Malawi for Ingwe Bus Services. He justifies the 25 percent fees.

“It is risky carrying money across such a long distance like that because anything can happen. You can get robbed on the way and you could also get tempted to use the money so to avoid that it is better to have your own cut so that if you need anything you can use your own,” he said.

Malimbasa said if she had a choice, she would prefer to send her money through the bank. But she and most of her friends continue to send cash through bus drivers or friends who are travelling back home because the banks have a major catch.

“When you use the bank they ask for too many documents like passports, bank accounts and identity cards which most of us do not have. Most of us only have a passport and in most cases our days of stay already expired and that could get you in trouble with authorities,” she said.

Sending money with the bank might be safer and slightly quicker, but it isn’t necessarily cheaper - an important point for many people where every cent counts.

The Standard Bank in Johannesburg, for example, charges a minimum of 0.45 cents for very Rand send via an international money transfer. The charges range between a minimum of R130 and R645 depending on the amount being transferred.

Ellen is not the only one facing these problems as South Africa has the largest immigrant labour force in the Southern African Development Community (SADC) region.

A guard who comes from

ON REMITTANCES l Bus drivers are the most popular way to send money home. The doorto-door service often outweighs the high cost.

YOUTHS FACE JOB CRUNCH Text VICTORIA MTOMBA

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WHEN SENDING MONEY TAKES

AGES Of the R11.2 billion sent outside of South Africa every year, a staggering R7.6 billion is carried by informal channels rather than banks or money transfer Text KANDANI NGWIRA

Flow of remittances from South Africa to other SADC nations

l Zimbabweans are the group of migrants in South Africa who are most likely to send remittances. l It is more expensive to send money from Tanzania to Rwanda than anywhere else in the world. l It is cheaper to send money from the United Kingdom to South Africa than from South Africa to other African countries.

Source: FinMark Trust, 2012

Zimbabwe and works night shift in the freezing cold of Johannesburg related a similar story of finding problems sending money home to the loved ones.

“Sometimes I use Western Union but when there is a family friend travelling to Zimbabwe I usually send the money through that person because there are many Zimbabweans in this country so it is not difficult to help one another in sending money back home,” he says.

It is possible to send money without a document using operators such as Western Union. But that is another hurdle because the person at the other end has to produce identification to pick up the money.

This often means old people in villages, who do not have documents such as passports, have to look for someone else to help them out.

Western Union’s services, which are popular because the money arrives within about ten minutes of the transaction, are not cheap. They charge 17 percent which works out as $10 for every $60 that one sends.

A pioneering study by DNA Economics estimates that the size of the SADC migrant population in South Africa is approximately 3.3 million of which more than half are Zimbabweans.

The study called South African and the SADC Remittance Channel found that around half of all migrants working in South Africa send money home and the average amount sent is between R6,500 and R4,500 home per year.

Remittances play a pivotal role in ensuring that families back home have incomes to survive on year in, year out, the study said.

Of the R11.2 billion sent outside of South Africa every year, a staggering R7.6 billion is carried by informal channels rather than banks or money transfer, the study estimated.

The report called for SADC to adopt a European model on money transfer by harmonising the charge fees for all international money transfers in all countries in the region.

“Making international money transfers within the European Union is now (in theory at any rate) easier and less costly than it used to be,” says the report.

almer sits on the veranda of her parent’s house in the suburb of Warren Park in Harare together with one of her students. The parttime tutor holds a maths book in her hand while she explains how to calculate logarithms.

Palmer offers maths, English, accounting and economics lessons to adults hoping to pass their ordinary level, Zimbabwe’s equivalent of an ‘O’ level.

It’s easy material for Palmer, who holds an economics degree from Zimbabwe’s Midlands State University. This year she is finishing her Masters of Economics degree. Despite her high qualifications, tutoring is the only work she can find at the moment.

“I have been looking for a job for the past two years,” said Palmer, who worked for Wedzera Petroleum until mid2011. Since the company went bankrupt, her life has not been the same.

Palmer needs to work, she explains, because her parents have four other children still at school.

“The problem with tutoring is that most of the people fail to pay at the end of the day,” she said. “I charge them US$10 a month but out of maybe 20 people only six will pay.”

In Zimbabwe, jobs within the formal sector are few and far between for the country’s young people. And many people across southern Africa share Palmer’s story.

Youth unemployment is seen as a major threat in Southern African Development Community (SADC) countries, where more than three quarters of the region’s population are under 35.

Youth unemployment in most African countries is above 25 percent.

In South Africa, more than half of those who are unemployed are young people.

Lesego, a first year student at the University of Johannesburg, said getting a job in South Africa is becoming difficult.

“It’s tough for one to get a job especially with our economy because it’s not clear where it’s going. One needs to be a hard worker if he or she has to survive,” she said.

Through its high youth unemployment figures, SADC is facing many challenges that include despondency, despair, deviancy and crime as well as alcohol and drug and substance abuse among the young people.

In May this year, African leaders at the African Youth Charter Summit agreed to reduce youth unemployment to two percent by 2018. The charter is a political and legal document which serves as the strategic framework that gives direction for the empowerment and development of youth.

At the meeting, they agreed that the absence of a coordination structure for youth development and a regional standard measure makes it difficult to compare how much progress was being made.

BUSINESS AND FINANCE

RAILWAY TO BENEFIT SWAZIS? Great hopes for cross-border project Text PHATHIZWE-CHIEF ZULU PHOTO FREEPIK

A

fter having worked as a domestic worker in one of Johannesburg’s suburbs as a teenager, Alice Sibanda is now an informal trader selling fruit and popcorn along Enock Sontonga Road. It is her only source of income.

Sibanda, a mother of three, lives in a rented house in Laanglagte, a poor suburb of Johannesburg. She struggles to strike a balance between her business earnings and home expenses, with her average daily earnings pegged at R175.

She has been selling fruit for the past eight years and remembers how her business was threatened with extinction when she had to borrow money from friends and relatives to buy her goods.

“I cannot borrow money from a bank to put into my business because they ask for papers such as payslips, which I do not have,” Ms Sibanda explained.

Like Sibanda, small trader Makhosi Molapo says she is unable to access loans to grow her business.

She currently has a mobile fast-foods trailer selling chicken, fritters and pap.

Molapo, who operated a formal take-away ten years ago, explained that it was much easier for women

For transport economist Andrew Marsay, the rail project is too big for Swaziland. New Africa asks why

In the context of a small economy like Swaziland, what could the project mean?

If Swaziland can generate high volumes of freight, such as the transport of coal or other minerals, it can be a viable project. But the Lothair-Sidvokodvo railway line has been designed to be a general freight. It does not make economic sense to have such a line, because it is expensive to maintain. The government has to subsidise the costs every year, which is huge economic burden for the countries because they have to spend billions of Rands building, maintaining infrastructure and then pay annually subsidies to keep the freight costs on rail low.

in KwaZulu-Natal, enabling Transnet to raise the yearly capacity of the coal line to over 90 million tons.

South Africa’s Public Enterprises Minister Malusi Gigaba said the project is core to improving access to eastern seaboard ports as well as improved access to the southern African logistics network and markets.

However, transport economist Andrew Marsay from the Johnstaff

consulting company said to New Africa that in general, freight railway is not economically viable unless it is moving high volumes of goods, and this wouldn’t be the case for the proposed railway line.

Swaziland imports more than 80 percent of its goods from South Africa, which in turn imports about 70 percent of Swaziland’s exports, which include coal, sugar, beef and citrus fruits.

FINANCING FEMALE ENTREPRENEURS Text MIRIAM ZIMBA

‘RAILWAY MAKES NO ECONOMIC SENSE’

How viable is the project?

In my opinion it is not a very good idea. Investing in general freight is not economically viable. In general rail is a viable project but it depends on the magnitude of volumes of freight that a country can move on that railway line. The higher the volume, the bigger the proits the line can generate.

S

outh Africa and Swaziland are working on a 146-kilometre railway project which could help establish trade corridors with South Africa and within the South Africa Development Community (SADC).

The project, which is to cost R17 billion, will see Swaziland paying R1.6 billion while South Africa will bear the remaining R15.4 billion.

Small and medium size Swazi traders who import most of their wares from South Africa are optimistic about the project. They feel the new railway infrastructure will also have positive business benefits for the consumer by lowering the prices of commodities because of the potential reduction of transport costs.

“We hardly use the train in Swaziland because the industry is limited to big businesses who use trains to carry freight” said Goodman Gumbi, a burgeoning young businessman who buys his supplies from South Africa.

Towards the end of last year, South Africa and Swaziland signed a memorandum of understanding to commit resources to the crossborder rail connection from Lothair in Mpumalanga in South Africa to Sidvokodvo in Swaziland.

“We’re very excited that Swaziland is part of the development because this project will also increase the amount of goods transported in the region,” said chief executive officer of the Federation of Swaziland Employers and Chamber of Commerce, Zodwa Mabuza.

South Africa will use the link to divert general freight from the existing heavy-haul corridor from Ermelo to the Port of Richards Bay,

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to access financial assistance from banks and micro finance institutions before the government introduced the National Credit Act in 2007. The Credit Act prevents people from spending money they don’t have. It also helps the banks manage massive credit debt by stopping reckless lending by banks.

“Ten years ago, it was easier to get loans from banks even without collateral,” she said. “I managed to access R100, 000 from ABSA Bank and I was not asked for any collateral.”

However, since the introduction of the Act, which entails conditions such as the need for collateral, bank statements, pay slips, business registrations and tax numbers, many women in the informal sector are unable to access finances for their businesses.

Because of such difficulties in organising finance, Molapo recently had to ask her sister who is in formal employment to access a bank loan of R5,000 to buy the trailer for her business.

She has had to enter into an informal agreement with her sister on the repayment of the loan.

“From the time my previous business went down, it took me about three years to re-establish myself. I moved from one bank to

another but I could not access any financial assistance because I am not in formal employment and I have no fixed asset which I could place as collateral,” she explained.

The situation is not so different for most women across the Southern African Development Community (SADC) region, where poverty levels among women are the highest in the world.

Economic empowerment programmes for women are critical to their emancipation said Jacqueline De Matos Ala, a senior lecturer in the department of International Relations at the University of Witwatersrand in Johannesburg Dr Ala said that SADC governments could adopt best practices from countries such as Bangladesh, whose civil society organisations have instituted the Grameen Bank, which finances women empowerment projects The Grameen Bank of 1976, a home-grown concept of Jobra Bangladesh and owned by mostly poor women, does not require any collateral against borrowing on its micro-loans. Ninety-six per cent of the over eight million borrowers at the bank are women.

According to Dr Ala, because women often lack access to financial

services their businesses tend to stay small, which mean they are not competitive with bigger businesses that have access to financial services.

She appealed to SADC governments to promote home-grown initiatives such as women cooperative societies, where money is pooled and circulated among the members at regular intervals.

Contrary to perceptions that women lack prudent financing mechanisms, Dr Ala believes that women are a low risk group who always pay back loans in comparison with their male counterparts.

SADC has a target of having 50 percent women in decisionmaking positions by 2015.

It is not until some of the SADC targets on paper are transformed into reality that people like Sibanda and Molapo, who represent millions of other women across the region can begin to reap the benefits of women empowerment.

Though railway costs are said to be lower than those of roads, why business still prefer to use road?

The problem with rail is that it does not accommodate small-scale volumes of freight, hence, small business people do not beneit. So they will continue to prefer the roads.

It is only big businesses which are able to move the bulk of freight to meet the required volumes.

Basically, is it a wrong move to invest in general freight line?

I’m really not against rail but a general freight rail line has to service at least 16 million tons to make it viable and it is unlikely that Swaziland can reach that scale.

OUR VOICES

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SADC, IMPROVE OUR LIVES! New Africa interviewed journalists from several southern African countries on how the SADC could improve the living standards of the people living in the region. The SADC was founded in 1992 and headquartered in Gaborone, Botswana, with 15 member states – Namibia, Zambia, Zimbabwe, South Africa, Lesotho, Tanzania, Swaziland, Mozambique, Malawi, Botswana, Mauritius, Seychelles, Angola and the Democratic Republic of Congo (DRC) Text MULISA SIMIYASA PHOTOGRAPHER KATE HAIRSINE

Majirata Latela LESOTHO

I want SADC to help my country ight poverty, unemployment and disease

KANDANI NGWIRA MALAWI

SADC should develop its roads and railways to speed up the movement of goods

ANGELA CHISHIMBA ZAMBIA

We are one family, so SADC should open up border posts for people in the region to move freely from one country to another

Emmanuel Luciano MALAWI

VICTORIA MTOMBA ZIMBABWE

SMANGA KUMALO SOUTH AFRICA

SADC states should work towards having shared common views and ideals

What we need in Zimbabwe is money to strengthen our economy and I don’t know if SADC has money to assist us

Too many people here are sufering from HIV/Aids. There should be more awareness and better treatment

MIRIAM ZIMBA ZAMBIA

I want media freedom for all journalists in the SADC region

MONGEZI ZULU SWAZILAND

SADC’s individual states should see to it that each and every resident has access to clean water

KUDZAI CHIMHANGWA ZIMBABWE

The ire-ighting and “shadow boxing” within SADC member states has to end, so it can work more efectively

MULISA SIMIYASA NAMIBIA

SADC should open up its doors to the media and talk to us – we want more transparency

A DW Akademie Workshop Magazine With financial support from the Federal Ministry for Economic Cooperation and Development (BMZ) Editors: Angela Chishimba, Emmanuel Luciano, Kate Hairsine, Petra Bornhöft Design: Ricky Hunt and Gabriel Seeber Reporters: Mulisa Simiyasa, Angela Chishimba, Mongezi Zulu, Majirata Latela, Kudzai Chimhangwa, Kandani Ngwira, Miriam Zimba, Smanga Kumalo, Victoria Mtomba, Emmanuel Luciano Date: July 2013