Monday, October 26, 2020

Cost of trading in Botswana 50 times higher than in Kenya

A Rand Merchant Bank report shows just how geography and commerce have connived to wreak havoc on landlocked countries like Botswana.

“For landlocked African economies, the cost of trading is 50 times higher and the volume of trade is 60 percent lower than in African coastal countries,” says the latest edition of RMB’s Where to Invest in Africa report.

Relief should have come in the form of a resolution made at the International Ministerial Conference of Landlocked and Transit Developing Countries and Donor Countries and International Financial and Development Institutions on Transit Transport Cooperation organized by the United Nations in 2002. At this conference, OECD countries “recognised the special needs and problems of the landlocked developing countries and urged both bilateral and multilateral donors to increase financial and technical assistance to this group of countries to meet their special development needs and to help them overcome the impediments of geography by improving their transit transport systems.” They emphasised “the need for a substantial increase in official development assistance and other resources in the mobilization of financial and technical assistance from all sources and existing mechanisms, including the private sector.” On such basis, these countries undertook to provide landlocked and transit developing countries with the appropriate financial and technical assistance in the form of grants and/or loans on the most concessional terms possible for the needs identified.

That didn’t happen. The result is that Botswana, Burkina Faso, Mali, Rwanda and Uganda are some of the most affected, experiencing a decrease of more than 20 percent in official development assistance as a percentage of GNI between 2010 and 2011. In 2010, disbursements to Botswana totalled US$110.49 million, the following year they dropped to $91.13 million and in 2012 were US$63.7 million.

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