REDUCING BARRIERS TO TRADE IN ECA REGION

Best Practices in Expediting trade and transport

Borderless 2013 Accra Ghana Thursday February 21

David Adolwa
Regional Transit Advisor USAID COMPETE Program

The views of the presenter may not Data compiled by USAID COMPETE from various studies completed in 2009

PRESENTATION OUTLINE

INTRODUCTION

BACKGROUND

MALABA EXAMPLE

USAID COMPETES INTERVENTIONS

WHAT IS BEING DONE

WHAT NEEDS TO BE DONE

COMPETE FACT SHEET

Northern Corridor

Central Corridor

http://www.eastafricancorridors.org/home

Dar Corridor

COST PER KILOMITER

Cost per Kilometer
US$ Per Kilometer 12 10 8 6 4 2 0 11 5 6 7 8

2
Pakistan

3.5

4.5

Lome(Togo) to Ouagadougou (Burkina faso)

The high cost of transport is the most significant barrier to trade and investment in East and Central Africa. Africa remains the most fragmented continent and is composed of micro economies excluding Nigeria, South Africa and Egypt. Africa is home to the majority of landlocked countries and least-developed countries. Intra-African trade is very low. At an average of 10 to 20 %, the level of trade among African countries compares unfavourably with other regions of the world. Intra-trade among the EU-27 is around 70 per cent, 52 per cent for East Asia, 50 per cent for North America and 26 per cent for South America. A major constraint to regional and international trade is the high transaction costs for trade across borders in East Africa due to deficiencies in soft and hard infrastructure. The problem is even more severe for the landlocked East African Countries that include Rwanda, Burundi, DRC and South Sudan.

Western Europe Long Distance France

Douala(Cameroon) to N'Djamena(Chad)

Durban Lusaka

Mombasa to Kigali

brazil

United States of America

China

Weigh Bridges 3%

Customs Checks 2%

Police Road Blocks 2%

Escorts 1%

Personal 5% Others 7% Insecurity 9% Vehicle Breakdown 9% Port Procedures 49%

Border Post Controls 13%

Source: USAID COMPETE

WHERE ARE THE ISSUES?

Local issues 58% Regional issues 17%

Bilateral issues 25%

LETS GO TO AN EAST AFRICAN BORDER

MALABA

UGANDA

2009
650 Trucks per day Frequent power outage Single lane bridge Corruption Insecurity Turf wars Incompetence Multiple inspections up to 12 separate inspections Delay up to 3 days

2012
1,000 Trucks per day Frequent power outage Single lane bridge Greater transparency Improved security Collaboration amongst agencies Joint inspections Border open 24/7 3 hours border crossing time
KENYA

17

REDUCING BORDER PAIN

JICA, WORLD BANK, TMEA , AFDB
EXPAND AND IMPROVE HARD INFRASTRUCTURE Ports handling capacity Roads infrastructure Rail/pipelines Border Posts infrastructure
Roads
Weigh Bridges Cranes ICD One Stop Border Posts

DEPLOY ICT SOLUTIONS

USAID COMPETE FOCUSCustoms Clearance Systems

Single window systems Revenue Authority Digital Data Exchange Single Window Operations Systems

Automate clearance processes Reduce Human/Human intervention Reduce Paper work Collect Data

OPTIMIZE SOFT INFRASTRUCTURE Change Culture Defuse Tensions Promote Best Practice Eliminate border/HQ disconnect

Joint Border Committee Lean Operations Joint Inspections Resource Sharing Joint Resource Mobilization Private Sector Participation Best Practices Training

The Joint Border Committee

Multi-sectrol collaboration of key Government agencies as well as Private Sector involved in the clearance of cargo for the purpose of: Define of critical operational challenges at the borders Enhancing inter agency collaboration at border post Promoting the sharing of available resources at the border Creating a trade facilitation mind set Defusing tension and conflict between public and private sector Eliminating the disconnect with HQ

Rationalizing control and regulation at the border

Government Agencies

Private Sector

Local Government

Development Partners

OUT BOUND CUSTOMS CONTROL AREA

INBOUND CUSTOMS CONTROL AREA

IN BOUND CUSTOMS CONTROL AREA

OUT BOUND CUSTOMS CONTROL AREA

OUT BOUND CUSTOMS CONTROL AREA

INBOUND CUSTOMS CONTROL AREA

IN BOUND CUSTOMS CONTROL AREA

OUT BOUND CUSTOMS CONTROL AREA

ONE STOP BORDER POST CUSTOMS CONTROL AREA

ONE STOP BORDER POST CUSTOMS CONTROL AREA

WITH SUPPORT OF TMEA/ JICA/ AFDB AND WORLD BANK

COMPETES JOURNEY THROUGH ECA

Over 201,000 km Travelled Over 1,900 persons mobilized Over 75 Government

Agencies involved

3 Corridors covered
16 border posts visited and
Joint Border Committees established at each border post

RADDEx

REVENUE AUTHORITY DIGITAL DATA EXCHANGE

International Sea Port

Inland Border Post

Destination or Origin of Cargo

KEY TO SYMBOLS

Cargo Truck Customs Data

REGIONAL CUSTOMS PROCEDURES

HARMONIZED CUSTOMS PROCEDURES

Bench marked to WCO standards and simplified across all the five EAC countries.
POST CLEARANCE AUDIT MANUAL which aims at enhancing cargo clearance through operational space that Post Audit provides.

CUSTOMS VALUATION MANUAL

Enables businesses to understand the Customs Valuation procedures and processes. It adds to the efficiency of clearing processes through avoidance of valuation related disputes.

ONE STOP CENTER DAR PORT

THE COMPETITIVENESS & TRADE EXPANSION PROGRAM

123 Gardenia Road off Magnolia Road, Gigiri P. O Box 1555 00606 Nairobi, Kenya T: +254-719-032-000 F: +254-719-032-271 E: info@competeafrica.org www.competeafrica.org

THANK YOU VERY MUCH FOR YOUR ATTENTION