Landlocked Malawi has continuously searched for means of reducing the cost of doing international trade and related logistics. The cost of moving cargoto and from the various sea ports in neighbouring countries has a huge impact on the final delivery cost of commodities. This has rendered Malawian exports unattractive on the international market and makes imports very expensive.
It dawned on the then President of Malawi, late Professor Bingu wa Mutharika, in October 2013 to launch Nsanje world Inland Port in a ceremony marked with colour and pomp. The function was attended by President Mugabe of Zimbabwe and President Rupiah Banda of Zambia but the most notable absentee at the function was the then Mozambican President Guebuza. Sadly the ceremony ended in embarrassment as the supposedly test barge was detained in Mozambique for sailing in sovereign territorial waters without any authorization. This should have been common knowledge by Malawian authorities that to sail in foreign waters required a set of protocols and procedures. The Ministry of Foreign Affairs exists to provide direction to the civil authorities when faced with such situations.
Despite the national embarrassment, Malawi has gone full throttle to market the inland port at several international forums with regard to completion and realization of the project. Sadly again, this is being done in the absence of a feasibility study, that will determine viability of the whole project. Currently afeasibility study is underway and from recent media reports it seems the study is nearing completion. Hopefully, the study results will be positive. But in the event that the results of the study are negative in the Malawian context, what will happen to the huge capital already invested in the quay side construction?
The authorities in Malawi have advanced the thinking that by having an inland port in Nsanje, the cost of importation will be effectively reduced by 60%. How the calculations were arrived at, is subject for another day. The need to reduce cost of inland haulage is real. It is obvious that Mozambique is dragging its feet on the Inland Waterway project due to a number of issues. It is an obvious fact that Mozambican transporters benefit hugely from Malawi’s landlocked status. Secondly there is a danger of losing revenues levied by the ports once Malawi imports cease using Mozambican Ports of Beira and Nacala. However the solution to Malawi’s landlocked woes cannot be achieved by pushing and shoving Mozambique to dance to Malawi’s tunes without following proper protocols and procedures.
In the event that the Nsanje Inland Port project goes ahead, a number of questions are worth asking. What are the practical realities that the overall cost of importation will go down? What is the projected user demand of the inland waterway? What is the capacity of the channel in terms of water level and the size of barges that will operate in the channel? What commodities are being targeted to utilize the waterway? Considering that there is a general shift from break-bulk towards cargo containerization, will the waterway attract enough business to make it commercially viable? Has the Malawian government engaged the shipping lines operating in Malawi with regard to implementation and operation of the waterway?
It is common knowledge that any port should be able to attract direct calls in order to be commercially viable. Do the import and export volumes out of Malawi warrant such direct calls? If the answer is yes, well and good. But if answer is no, then vessels and barges into Nsanje port will be feeder vessels picking up cargo from the same Beira and Nacala ports. This operation will simply increase transit time and handling costs since there will be double handling at Beira or Nacala and again at Nsanje.
When the cargo eventually gets discharged at Nsanje Port, there will be a requirement for inland transportation by either road or rail to the major commercial centres of Blantyre and Lilongwe. This again will be an additional cost considering the distances from Nsanje. All these factors put together increase the overall cost of importation, quite a setback to Malawi’s expectation.
A World Bank assessment conducted in 2004 concluded that the volume of trade for Malawi is small and Malawi is not generating enough traffic by itself to justify its own gateways. For instance petroleum imports for Malawi do not fill a tanker (vessel) and the container traffic of Malawi is only a fraction of the capacity of the port of Beira.
As a country, Malawi needs to swallow its pride and accept that Nsanje Port may never come to be. It is time to look at realistic and achievable options. Quelimane Port in Mozambique comes to mind. Quelimane Port has the shortest distance of all ports in Mozambique with regard to major towns in Malawi.
At only 306km to Blantyre, Quelimane Port presents an exciting prospect worth investigating and developing as it would drastically reduce transit times but also on-carriage cost. The Port is already developed and large container vessels operated by the major shipping lines call this particular port. Malawi can benefit from Quelimane Port by entering into bilateral agreements with Mozambique and engaging multi-lateral donors to finance construction of road infrastructure from Quelimane to Muloza border. Malawi has similar agreements with Tanzania where Malawi has an inland cargo centre at Kurasini in Dar es Salaam to handle and cater for Malawi’s imports.
With the Quelimane Port option, Malawi will cut down transit times from current 3 days for Beira and 7 days for Nacala to a mere 6/7 hours. The cost of inland haulage will go down from around $4000 to $900 per container due to the short distance. That is what can be described as realistic cost reduction and savings. In opting for this, there would be no diplomatic friction with Mozambique as evidenced with the Nsanje Inland waterway attempts. As it stands, Malawi needs look at Quelimane Port.
- Frank G. Chirwa is National Imports Manager for Mediterranean Shipping Co (Malawi) but writes in his personal capacity.