Supporting the Policy Enabling Environment for Development

Economic Costs of Port Scanning Fees - Briefing Paper

In April, 2006, the Council of Ministers issued Decreto n.o 10/2006 authorizing the introduction of non-intrusive customs inspections using modern scanning technology, through a concession to a private-sector operator. The Decreto suggests that the concession arrangement was motivated by the high cost of procuring and operating the scanning equipment (contornar a problemática dos elevados custos que o equipamento acarreta). The Decreto also provided for the concessionaire to recover its costs by charging fees to the shippers. The Government then awarded the concession to Kudumba, a new Mozambican company.

When the government released the schedule of fees for the scanning inspections, a wave of protests ensued. The Maputo Corridor Logistic Initiative (MCLI) called the charges “unprecedented and unacceptable,” and the Maputo Port Development Company (MPDC) labeled them as “entirely unrealistic and ridiculous.” These groups contend that the charges will divert traffic from Mozambican ports, undermine the competitiveness of local industries, impair international trade, and discourage investment.

This note addresses the controversy by presenting an independent analysis of the economic effects of the new scanning fees, based on a desk study of the issues. As background, the next section provides a general explanation of the role of scanners and fees in the customs clearance process. Section 3 outlines the available facts about the fees in Mozambique. Section 4 discusses the economic effects of the scanning fees, and section 5 ends the paper with a short summary of the

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