Maputo Corridor Logistics Initiative

Statement on the Closure of the Maputo Corridor Logistics Initiative

Made at the MCLI Conference on Illicit Trade
Thursday the 7th of February 2019
Emnotweni Arena, Mbombela

Today marks the closing of a phenomenal chapter in life of the Maputo Corridor, and particularly in the story of the Maputo Corridor Logistics Initiative.

It is with a profound sense of sadness, but an equally profound sense of pride that we announce the closing of this dynamic corridor institution.

Our pain is acute, as so much has been done to avoid this very moment, but I will speak more of those efforts in a moment.

Our deep sense of achievement and pride is centered on the principles which informed the establishment of the MCLI. It was formed in the crucible of risk, hope, vision, determination, and still more importantly, an unwavering belief in the ability of the people of this region to work together to make the Maputo Corridor the first choice for the region’s stakeholders. In 2004, the first private sector corridor management institution on the African continent was established and took the transport and logistics sector by storm in its ability to work closely with public and private sector stakeholders to address non-tariff and technical barriers to trade.

The rest is history. Volumes through the corridor have grown exponentially since MCLI’s inception, with a record 19,5million ton throughput via Port Maputo in 2018. This is due, in great measure, to the partnership approach which has become its trademark. We have been able to partner with the public and private sector, understand the dynamics and demands of both, and provide clear and pertinent information to all stakeholders across the spectrum. This has been crucial in clearing the negative perceptions which dogged the Port of Maputo at the start of its historic concession period in 2003.

Little of this would have been possible without the constant efforts of MCLI and its stakeholders working together to ensure the best possible outcomes for trade. The region remains one of the leading growth areas within SADC and this is entirely as a result of the role that every organisation has played in enabling MCLI to gather information, bring people together and jointly resolve the problems we encounter. It is this dynamic that has gained MCLI its reputation as a model corridor management institution on the continent and in the international transport and trade facilitation environment.

Two critical interventions by the World Bank’s Sub Sahara Africa Transport Program, namely the revision of transit legislation in Mozambique in 2011, and the drafting of a comprehensive strategy and draft Memorandum of Understanding which updates the existing and outdated bilateral agreement, are significant milestones which have and will continue to have an impact on the Maputo Corridor for some years to come. In addition, the piloting of the Corridor Transport Observatory enabled us to draw on real time sample data to begin to understand the dynamics of the corridor’s trade and impact.

It is extremely difficult to quantify the impact of the MCLI’s work over the years, but it is clear that without the organisation’s ability to harness and exploit every available platform for highlighting the benefits of the Maputo Corridor and its growth in capacity and throughput, the Maputo Corridor would not have achieved the status it has as one of Africa’s leading transport corridors.

Our sense of sadness arises from the twin challenges of capacity and funding that have plagued the organisation since the outset. Despite these challenges we were able to consistently maintain rigorous governance standards and achieve a succession of clean audit findings.

In the past three years, however, the struggle has escalated with the staff complement reduced from four to just two, and we have really battled to do justice to our mandate and to ensure that we cover all the bases. The withdrawal of key infrastructure investors such as TRAC and the Port of Maputo in 2014 and 2016 respectively has been examined from many angles based on the benefit that has accrued to these companies through the untiring work of MCLI. The financial risk has been considerable, and far too much time has been spent in the pursuit of funding rather than effectively fulfilling the actual mandate of the organisation.

The Board’s decision to cease operations at the end of February 2019 was taken after two years of unrelenting pressure and a thorough examination of the different options confronting us. The Board has stated emphatically that the closure in no way whatsoever reflects on the work of the organisation, but is the result of some very difficult decisions around the texture of the economic landscape and the sad reality that neither the Port of Maputo, nor TRAC for that matter, have fully appreciated the value of MCLI. Much effort, by many, has been put into attempting to address and resolve these differences, but to no avail. The closure of MCLI is the sad but inevitable outcome.

We are gratified that the World Bank supported development of a revised draft Memorandum of Understanding, which MCLI was able to present to the three corridor governments, is a process that will continue despite our absence. The SADC Secretariat will continue to work as the facilitator and while the ratifications through Parliament may take a while, the signing of the MoU requires, as part of the agreement, to establish a corridor management institution which we hope will have the balance of public and private sector role players that have characterised the nuts and bolts of MCLI’s daily workings since inception. It will be, again, the responsibility of the private sector to ensure that they are adequately represented in the institutional arrangements and operation of the new Corridor Management Institution resulting from the MoU.

There are so many people to thank at a time like this and I cannot hope to cover every one. Some people do, however, deserve a special mention.

First and foremost, we must extend our grateful thanks to Dr António Matos and Dr Mathews Phosa who have been the untiring Chairmen of MCLI. They filled the very big shoes of Jorge Ferraz who was the first Chairman and who set the tone for the collaborative engagement and conciliatory approach which we hope to have retained over the past 15 years. In addition, the first CEO, Brenda Horne, was instrumental in taking the organisation into the spotlight and winning the hearts and minds of the logistics and supply chain community on the corridor. Her legacy is phenomenal and we will forever be indebted to her for her work.

We also thank our Board of Directors, the major funders over the years as well as our loyal members, the majority of whom have remained on-board since 2004 and who have believed in us, supported us and have been a constant source of expertise and encouragement in the often very difficult work that we do.

We close this chapter with heavy hearts, but with the comfort of knowing that our work has been worthwhile in every way, and that every member of staff we have had in this phenomenal team have invested their passion and conviction in this important work.

I have a strong conviction that the continued efforts of the corridor countries to sign the requisite agreements and plot a sustainable way forward will be successful.

On behalf of the MCLI team, I would like to thank you, our stakeholders and members for your unwavering support and thank you for the ride of our lives. I speak for us both when I say we have never had a job more difficult nor more rewarding. We have met so many truly inspiring people in every imaginable sector and I have been enormously privileged to have learned as much as I have. You have all, in ways you will never know, impacted on my life in ways you will never know, and I thank you for your generosity and commitment to this region.

May our countries grow through wise and considered policies and more importantly, implementation of that policy, and may none of us miss an opportunity to make a lasting contribution to this wonderful continent.

Barbara Mommen
Chief Executive Officer