What infrastructural developments have been underway at TICTS over the past year?
We received two new large cranes, costing around USD10 million each, at the end of December and went into operation in January 2017. In addition, we have purchased substantial amounts of new equipment and made some structural changes. The government has increased custom checking: now there is 100% scanning and heightened customs verification, and we have had to make additional smaller investments to increase our verification area to be able to cope with the increased activity. We also needed to employ more staff to cope with increased customs inspections and size up our office space as a result. The new regulations mean sometimes there are more queues while boxes are waiting on trucks for scanning. The scanners are currently situated outside the terminal, and though we hope to relocate them in the future, we have employed additional staffing for the time being.
Have traffic flows in the region increased since 2016?
While local traffic has in fact declined by around 5% in 1Q2017, the transit cargo of the neighboring landlocked countries has been increasing. I attribute this to improvements in the economic conditions of our neighbors. In the DRC, the elections are now over, so things are back to business as usual. In Zambia, we have seen more mines opening in the Copperbelt, and with the uptick in copper prices, these businesses are now going strong. It has been difficult to forecast what will happen in Tanzania, and much will depend on governmental policies and the approach with the private sector and foreign investment. That said, if the economies nearby continue to improve, this will certainly have a knock-on effect on us, and we will see this in turn impacting the economy in Tanzania.
In light of the increase in regional traffic, how do you evaluate progress made to inland corridor projects in the Eastern and Southern African regions?
There has been a marked improvement in terms of infrastructure and connectivity in many of these corridors. While not all of these routes have reached optimum efficiency and we do face bottlenecks, we have seen a significant government effort to remove some of the obstacles impeding easy movement of cargo. Ultimately, the initiatives to boost connectivity through rail investment are extremely positive, and in addition to this, there are plans in the pipeline to upgrade road infrastructure as well. These demonstrated commitments are opening up Tanzania even more to regional trade.
Given that Tanzania is an obvious entry point for trade in the region, what needs to be done to ensure that it fulfills its potential?
Top priorities should be enhancing efficiency and reliability. On paper, Tanzania looks as though it is the most competitive entry point for the region based on proximity and direct corridors from Dar es Salaam to Rwanda and the DRC. However, in many ways ports like Mombasa in fact attract more business because they are renowned for their consistency in customs procedure. At Dar es Salaam, we are still somewhat lagging behind in this respect, although measures are being taken to correct this, such as the new 24-hour port-operating schedule. Costs are also a factor, and we will have to wait and see how the value-added tax (VAT) will impact transit cargo. VAT could weigh in heavily with shippers or freight forwarders when making decisions. If customs procedures can be further streamlined and overall efficiency increases, then we expect to see growth in traffic flows as a result. Currently, we seek to comply with higher levels of inspection, and this will definitely impact our revenues and our profitability. Technology, though it has still not yet taken center stage, will play a larger role in this with improvements to the scanning and checking process. I predict noticeable growth to begin in late 2018 or 2019.