Shoppers rush to Botswana despite duty surge

John Mangudya

Reserve Bank of Zimbabwe governor, John Mangudya

PLUMTREE — The hours are long and the border post, which opens at six o’clock in the morning until 10 o’clock at night, had kept many waiting during the dark hours of the night.
At seven o’clock in the morning, the border town of Plumtree, located 100 kilometres west of Bulawayo, is still asleep.
Down the road, a nurse in a white dress and blue jersey walks quickly in the chilly morning, presumably on her way to work.
The border post, however, is abuzz. A few metres from the border, Clive Matiwaza openly flashes a wad of Botswana pula notes. He is one of several money changers called “osiphatheleni” who operate at the border post.
Here, currency traders change South African rands and Botswana pulas and are an easy, round-the-clock alternative to the formal banking system for travellers between Zimbabwe and Botswana.
“It’s still a bit early, but I have managed to change money for several people,” Matiwaza explained, holding wads of cash in his hands and hoping for more business as the day progressed.
Peak business days, he said, were usually Fridays, month-ends and public holidays.
“That’s when there is a lot of business because a lot of people will be travelling to Botswana to buy things for resale at home,” he said.
During holiday periods such as Christmas, the border post has often had to operate 24 hours a day as it handles almost 12,000 travellers daily.
There has also been a marked increase in the number of travellers from South Africa who use the Plumtree border post to avoid congestion at Beitbridge border post. The processing of documents at this point of entry is more efficient.
Neighbouring Francistown in Botswana is the destination of choice for many Zimbabweans who often do single-day trips.
The trips are mainly for shopping purposes, with the relatively much lower prices offered by retailers for groceries in Botswana being an attraction for many locals.
The cheaply priced fuel in Botswana is also another pull factor; the pump price of P7,21 is equivalent to US$0,64 for petrol, nearly 50 percent cheaper than the pump price in Zimbabwe of US$1,26.
Attempts to rein in the influx of imported goods introduced earlier this year by government, have been so far futile.
In his Monetary Policy Statement made this year, Reserve Bank of Zimbabwe governor, John Mangudya, indicated that exports had declined from US$2,8 billion in 2014 to US$2,5 billion last year, and that although imports had declined from US$5,9 billion in 2014 to US$5,5 billion in 2015, there had been a trade deficit of US$3 billion.
Government last year reduced the amount of duty-free rebate enjoyed by individuals from US$300 to US$200. This was meant to stem what it said were trivial imports. The list of goods which attract duty was also expanded to include dairy products, bedding and other items.
Lobby groups such as Buy Zimbabwe, which support the purchase of locally produced goods, welcomed government’s intervention.
Zimbabwe Cross border Traders Association’s president, Killer Zivhu, said the higher duties would help fund government operations, as the cash-strapped administration looked for ways to expand its revenue base.
“The reduction of [the] traveller’s rebate is one of the measures meant to widen government’s revenue base,” he said.
An immigration officer at the border post said government’s measures had not slowed down cross border business, with travellers still streaming into neighbouring Botswana in large numbers.
“People are still going to Botswana in their numbers. Obviously it is not as it was back in 2008, but daily there is a lot of traffic,” said the immigration official who asked not to be identified for professional reasons.
The year 2008 marked the height of Zimbabwe’s economic crisis, which was characterised by widespread commodity shortages and hyperinflation.
I count 25 cars and a bus filled with passengers so early in the morning. This should be a sign that there is no letting up in traffic into the neighbouring country. With the country’s economic decline only worsening, indications suggest that the rush may only peak back to 2008 levels.
Nonsikelelo Mathe said she would continue going to Botswana because groceries were better priced there than locally.
“The shops in Zimbabwe are just over-priced,” she said.
“It also doesn’t matter what the government does in terms of taxes and duties, people will always find a way to beat the system because they are just desperate,” Mathe added.

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