Kiwi
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- Sep 30, 2009
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[h=2]Wakuu, nimeipata hii taarifa mahali naomba kuiweka jamvini. Wakati kuna wanaomfagilia Mwakyembe kwa hatua alizochukua kuhusu uboreshaji wa bandari ya Dar, taarifa za World Bank zinaendelea kumuumbua yeye na serikali nzima ya magamba. Habari ndiyo hiyo!
The Port of Dar Es Salaam, the second largest in East Africa after Mombasa, is one of the least efficient on the planet, hindering trade and economic expansion not just for Tanzania but also for neighboring landlocked countries. The cumulative delays at anchorage and dwell time can exceed 20 days, while international standards are around 3-4 days. In addition, official and non-official payments are high and prevalent. These inefficiencies are well known and mitigating them has been a priority in recent national strategies. However, the implementation of necessary policy reforms and investments has been slow and inadequate.[/h]
The lack of enthusiasm for reforms is explained by the asymmetric distribution of benefits and costs associated with the current inefficiency of the port. While gains are concentrated in the hands of a few wellconnected players, costs are diffused among multiple consumers, firms, and households across the country. Other contributing factors include the lack of awareness of costs by most consumers and firms, the unequal distribution of these costs, time inconsistency between costs and benefits associated with reforms, and the lack of coordination for decisive actions. These basic lessons of political economy help not only to understand why the Port of Dar Es Salaam has remained underperforming but also offer new directions on how to encourage the faster implementation of efficiency enhancing reforms.
Efficiency for a port is to facilitate trade of merchandise in and out of the country at the lowest costs and as fast as possible. For imports, these include the following chain of operations: (i) anchorage; (ii) berthing; (iii) merchandise unloading; (iv) customs clearance, and (v) exiting the merchandise from the premises. The chain is simply reversed for exports. The more cost-efficient the port is in handling these operations, the lower the costs for importers and exporters and greater the benefits for the economy.
The performance of the Port of Dar es Salaam has varied over time. As a result of privatization in the 1990s, the port became one of the most efficient in Sub-Saharan Africa, but its performance deteriorated gradually up to mid-2000s and efficiency is now low despite renewed efforts of the port authorities to implement reforms aiming to accelerate operations like establishment of an electronic single window system and facilitation of direct delivery of cargo.
Lack of efficiency can be measured by the extra delays and payments that shipping companies or traders have to deal with in the port of Dar es Salaam in comparison to those they would face in the port of Mombasa. The main symptoms of the port inefficiency are long delays, first at anchorage, and second in the series of operations necessary to exit merchandise from the port (the so-called dwell time). Port tariffs are also much higher than in Mombasa.
For the five operations described above, the total cumulated costs of extra delays and additional monetary payments compared to Mombasa are equivalent to a tariff of 22 percent on container imports and about 5 percent on bulk imports (see Table 1). For energy imports, which make up 35.5 percent of total imports, the tariff equivalent of extra delays and fees on liquid bulk could be as high as 37 percent. Inefficiencies for exports, however, are low due to limited custom process related congestion and cheaper freight rate that outbound cargos face.
Section: The Cost of Inefficiency: Winners and Losers of Perverse Incentive Structures
Section: Towards an explanation of the resistance to reform
The cost of inaction is already too big for the Tanzanian and regional economies, around USD 2.6 billion per year, and the port of Dar Es Salaam might lose its existing market share in regional trade when other ports and railways become operational in neighboring countries. Proposed are five objectives or principles that should be viewed as possible directions for enhancing the implementation of reforms in the port of Dar Es Salaam.
While each objective is important, we believe that their combination is critical to push for the rapid implementation of efficiency-enhancing reforms.
(i) Increasing end-users awareness of costs related to port inefficiency.
(ii) Reducing the bargaining or monopolistic power of current winners who profit from the status quo.
(iii) Reducing corruption which is the main channel exploited by beneficiaries of the status quo.
(iv) Motivating reformers.
(v) Improving coordination.
The Port of Dar Es Salaam, the second largest in East Africa after Mombasa, is one of the least efficient on the planet, hindering trade and economic expansion not just for Tanzania but also for neighboring landlocked countries. The cumulative delays at anchorage and dwell time can exceed 20 days, while international standards are around 3-4 days. In addition, official and non-official payments are high and prevalent. These inefficiencies are well known and mitigating them has been a priority in recent national strategies. However, the implementation of necessary policy reforms and investments has been slow and inadequate.[/h]
The lack of enthusiasm for reforms is explained by the asymmetric distribution of benefits and costs associated with the current inefficiency of the port. While gains are concentrated in the hands of a few wellconnected players, costs are diffused among multiple consumers, firms, and households across the country. Other contributing factors include the lack of awareness of costs by most consumers and firms, the unequal distribution of these costs, time inconsistency between costs and benefits associated with reforms, and the lack of coordination for decisive actions. These basic lessons of political economy help not only to understand why the Port of Dar Es Salaam has remained underperforming but also offer new directions on how to encourage the faster implementation of efficiency enhancing reforms.
- The port of Dar Es Salaam is inefficient but how bad is it?
Efficiency for a port is to facilitate trade of merchandise in and out of the country at the lowest costs and as fast as possible. For imports, these include the following chain of operations: (i) anchorage; (ii) berthing; (iii) merchandise unloading; (iv) customs clearance, and (v) exiting the merchandise from the premises. The chain is simply reversed for exports. The more cost-efficient the port is in handling these operations, the lower the costs for importers and exporters and greater the benefits for the economy.
The performance of the Port of Dar es Salaam has varied over time. As a result of privatization in the 1990s, the port became one of the most efficient in Sub-Saharan Africa, but its performance deteriorated gradually up to mid-2000s and efficiency is now low despite renewed efforts of the port authorities to implement reforms aiming to accelerate operations like establishment of an electronic single window system and facilitation of direct delivery of cargo.
Lack of efficiency can be measured by the extra delays and payments that shipping companies or traders have to deal with in the port of Dar es Salaam in comparison to those they would face in the port of Mombasa. The main symptoms of the port inefficiency are long delays, first at anchorage, and second in the series of operations necessary to exit merchandise from the port (the so-called dwell time). Port tariffs are also much higher than in Mombasa.
For the five operations described above, the total cumulated costs of extra delays and additional monetary payments compared to Mombasa are equivalent to a tariff of 22 percent on container imports and about 5 percent on bulk imports (see Table 1). For energy imports, which make up 35.5 percent of total imports, the tariff equivalent of extra delays and fees on liquid bulk could be as high as 37 percent. Inefficiencies for exports, however, are low due to limited custom process related congestion and cheaper freight rate that outbound cargos face.
Section: The Cost of Inefficiency: Winners and Losers of Perverse Incentive Structures
Section: Towards an explanation of the resistance to reform
- Recommendations
The cost of inaction is already too big for the Tanzanian and regional economies, around USD 2.6 billion per year, and the port of Dar Es Salaam might lose its existing market share in regional trade when other ports and railways become operational in neighboring countries. Proposed are five objectives or principles that should be viewed as possible directions for enhancing the implementation of reforms in the port of Dar Es Salaam.
While each objective is important, we believe that their combination is critical to push for the rapid implementation of efficiency-enhancing reforms.
(i) Increasing end-users awareness of costs related to port inefficiency.
(ii) Reducing the bargaining or monopolistic power of current winners who profit from the status quo.
(iii) Reducing corruption which is the main channel exploited by beneficiaries of the status quo.
(iv) Motivating reformers.
(v) Improving coordination.
- Extracts from: How to push efficiency enhancing reforms at the port of Dar Es Salaam?, by Jacques Morisset, Charles Moret and Julie Regolo, Africa Trade Policy Notes Number 35, February 2013.
