Border hustles

Border hustles

MASERU – FOR businesspeople in Quthing the Tele Bridge Border into South Africa serves no other purpose apart from being a crossing point for people.
If they want to import products worth more than M5 000 they have to go through Mafeteng which is some 100 km away. That’s because the border in Quthing does not have a Lesotho Revenue Authority (LRA) office to handle their imports.

Only five of the 14 borders into South Africa are classified as commercial ports. That means businesses in the other nine have to incur huge transport costs to import or export products.
The Private Sector Foundation of Lesotho (PSFL)’s chief executive, Thabo Qhesi, last week complained to the Southern African Customs Union (SACU) that the lack of commercial ports between South Africa and Lesotho was hurting local small businesses. Addressing the SACU road-show campaign to shore up the customs union’s brand, Qhesi said small Basotho business people incur “unbearable costs” when exporting to South Africa and other regional countries because most of the borders are not commercial ports.

“We only have five commercial borders in the country, namely, Maseru, Maputsoe, Caledon, Qacha’s Nek and Mafeteng (Van Rooyen’s),” Qhesi said.
He said from Mokhotlong to Durban in South Africa the distance is at least 300km through the Sani Pass border.

“This is the route Mokhotlong people take to get to Durban but after purchasing their stock they have to travel 426 kilometres via Harrismith to the Caledon Bridge only because Sani Pass is not a commercial border,” he said.

Caledon Bridge is in Butha-Buthe, the neighbouring district south of Mokhotlong.
Once the businessman has crossed into Butha-Buthe he has to drive another 176km to Mokhotlong.

“It is very costly and this brings up unnecessary costs of a 296 kilometre travel that could have been avoided had Sani Pass been a commercial border post,” Qhesi said.
The only way he can avoid using Caledon Bridge is by buying goods worth M5 000, the maximum allowed at the Sani Border post because it is not commercial.
“Non-commercial borders make Lesotho less competitive,” he said.

“Lead time is wasted. If you cannot deliver on time you are at the risk of losing customers and thereby bringing in less income for the business to survive”.
“If goods need to travel such long distances at such costs, these businessmen will make less profits even when they have a higher selling price.”
Qhesi said Lesotho is ranked 154 out of 160 countries in the Logistic Performance Index (LPI) of 2016.

LPI is an interactive benchmarking tool created to help countries identify the challenges and opportunities they face in their performance on trade logistics and what they can do to improve their performance.

The LPI is based on a worldwide survey of operators on the ground (global freight forwarders and express carriers), providing feedback on the logistics “friendliness” of the countries in which they operate and those with which they trade.

They combine in-depth knowledge of the countries in which they operate with informed qualitative assessments of other countries where they trade and experience of global logistics environment.

“This is an indicator to the investors that it is costly to invest in Lesotho if logistical costs are expensive,” Qhesi said.
“Borders such as Sani Pass, Tele and Peka Bridge should be commercialised to ease free flow of goods, and cut down unnecessary costs,” he said.
“We only have South Africa to do business with since we are landlocked,” Qhesi said.

’Makali Lepholisa Commissioner of Customs at the Lesotho Revenue Authority (LRA) said they are aware of the problems.
Lepholisa however said “we need the South African customs to be on board with the idea of extending commercial borders”.

Qhesi also said “the costs of sending products for accreditation and testing in South Africa are very high” making it difficult for Basotho to trade outside the country.
“This is one of the major impediments for Lesotho products to access the SACU market. When companies try to use the South African Bureau of Standards (SABS), the costs are very high to get accreditation,” Qhesi said.

Qhesi made an example of a small-holder farmer in Mokhotlong who wants to export goats to KwaZulu-Natal.
After getting the veterinary certification which attests that the goats are healthy to be exported, the farmer is compelled to go to Pretoria in the Department of Agriculture, Forestry and Fisheries in order to get an export permit.

Taking into account the distance from Mokhotlong to Pretoria, it is around 548 km for a single trip.
The return trip is approximately 1 096km and is a costly process for the small-holder farmer to do export business into other SACU member states.

Paulina Elago, Executive Secretary for SACU said there should be a “national dialogue for such issues that will help entrepreneurs”.
“The majority of the small traders are women and they really need to be empowered and have capacity building strictly for them,” Elago said.

Rose Moremoholo

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