7 October 2016 Last updated at: 6:29 AM
Malawi transporters concerned over foreign operators’ dominance
Local transporters have expressed concern over the dominance of Mozambican operators in transporting Malawi’s imports and exports.
Road Transport Operators Association (RTOA) raised the concerns during an interface meeting with the Malawi Chamber of Commerce and Industry on Wednesday afternoon in Blantyre.
At the meeting, the two parties highlighted some of the challenges hitting the transport operators. The interface was also attended by a representative from the Ministry of Transport and Public Works.
During the meeting, RTOA President Abdul Hal Lambat urged government to examine the possibility of introducing the quota system for transport services between Malawi and Mozambique saying the current system is in favor of Mozambican operators.
“The cost of doing business on the Beira Corridor is in favor of the Mozambican operators to the extent Malawian transporters are finding it very difficult to compete fairly with their counterparts. This is due to the monopoly on the transportation of Malawi’s imports and exports by Mozambican transporters. We therefore urge our government to introduce the quota system between the two countries, to and from the port of Beira in particular,” he said.
He also faulted the system of transportation of imports into the country saying it is doing more harm than good to the local transporters. “The Cost Insurance Freight (CIF) has encouraged the dominance of foreign operators as suppliers choose their own transporters. Malawian transporters would benefit a lot if Free On Board (FOB) system was applied for imports,” he explained.
Lambat added that his association is also being negatively affected by high interest rates in the country.
“Some of the challenges ranges from the high interest rates which is now at 37 percent to 43 percent. Another biggest challenge is the decision by the manufacturers who are opting to buy their own trucks and embark on distribution of their own products in the sidelines of local capacity. “This is being done to avoid the Value Added Tax being charged by our Government so we are urging the authorities to consider zero-rated VAT across the board for all the transporters,” he said.
On the new system at the Department of Road Traffic and Safety Services, Lambat said: “The new system is not helping the transporters at all saying they spend time at the DRTSS offices especially with COF and registration of vehicles yet the system can no longer take in its system the old vehicles despite having many vehicles unregistered.
“We are also urging our government to consider placing axle load weighbridge and the Mobile Weighbridges in well designated areas like in Blantyre and Lilongwe but not everywhere because trucks are issued with certificates before embarking on trips,” he concluded.
And speaking on behalf of the Ministry of Transport and Public Works, Principal Economist in the ministry Chimwemwe Kaunda, though admitting to the challenges faced by the operators, said some of the policies are made in order to protect the goods of the transporters.
“We are very much aware of the challenges being faced by the Road Transporters but sometimes, these policies are there in order to protect their goods and services. However, as a Ministry, we will take a look into these issues at hand though we won’t be able to solve them within the short period of time but we are working on them,” he said.